Evaluate is the diluted earnings per share

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Question 1: Hoffman Corporation had earnings available to common shareholders of $560,000 and a weighted average number of common shares outstanding during the period of 200,000 shares. The company has a convertible bond issue outstanding. The bonds were issued four years ago at par ($2,000,000), carry a 10% interest rate, and are convertible into 25,000 shares of common stock. The company has a 40% tax rate. Diluted earnings per share are

Option 1: $2.49

Option 2: None of the above is correct.

Option 3: $3.02

Option 4: $2.80

Reference no: EM132523188

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