View the step-by-step solution to:

Exercise 16-24 The Sage Corporation issued 10-year, $4,390,000 par, 7% callable convertible subordinated debentures on January 2, 2017.

Exercise 16-24

The Sage Corporation issued 10-year, $4,390,000 par, 7% callable convertible subordinated debentures on January 2, 2017. The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is 13:1, and in 2 years it will increase to 19:1. At the date of issue, the bonds were sold at 96. Bond discount is amortized on a straight-line basis. Sage's effective tax was 35%. Net income in 2017 was $7,950,000, and the company had 2,185,000 shares outstanding during the entire year.


(a) Compute both basic and diluted earnings per share. (Round answers to 2 decimal places, e.g. $2.55.)


Basic earnings per share$

Diluted earnings per share$

Top Answer

Basic EPS = (7,950,000 - 0) / 2,185,000 = 3.64... View the full answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online