Essay
During all of 2014 Rambler Manufacturing Company had 950,000 shares of common stock outstanding.On June 30,2014,the company issued 10,000 7 percent convertible bonds at par.The maturity value of each bond is $1,000.Each bond is convertible into 20 shares of common stock.None were converted during 2014.
Rambler also had 60,000 stock warrants outstanding for all of 2014.The option price is $10 per share.The market price of the common stock was $40 on December 31,2014,and the average market price for 2014 was $30.
Rambler reported a net income of $3,650,000 for 2014.Assume the company had a 40 percent income tax rate.
(1)Compute the basic earnings per share.
(2)Compute diluted earnings per share.
Correct Answer:
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Bonds--dilutive:
($10,000,000 * .07 * ....View Answer
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Correct Answer:
Verified
Bonds--dilutive:($10,000,000 * .07 * ....
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
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