Multiple Choice
Terrell Foods reported $950,000 in net income and its weighted average shares outstanding for the year is 200,000 shares.In prior years it sold $2,000,000 of 8% long-term bonds at par which are still outstanding.The bonds are convertible into 50,000 shares of common stock.The tax rate for all years is 40%.If Terrell has no other potentially dilutive securities and no preferred stock,what are basic and diluted EPS?
A) basic EPS $4.75; diluted EPS $4.18
B) basic EPS $5.34; diluted EPS $4.18
C) basic EPS $4.75; diluted EPS $3.80
D) basic EPS $5.34; diluted EPS $3.80
Correct Answer:
Verified
Correct Answer:
Verified
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