Hominem Inc. has 100,000 common shares outstanding. Earnings from continuing operations amounted to $1,680,000 (after tax) for the year ended 31 December 20X4. Hominem’s income tax rate is 25%. The company had no discontinued operations. At the end of 20X4, the market price of the company’s common shares was $36. Hominem had these additional components in its capital structure at the end of the year: 24,000 cumulative preferred shares outstanding since 20X2; each share is entitled to an annual dividend of $19 per share and is convertible into five shares of common after 30 June 20X9. 4% debentures amounting to $680,000 were issued on 1 January 20X4. On this issue date, the bonds were recorded at $605,000. The debentures are convertible into 10 shares per $1,000. On 1 January 20X4, similar bonds with no conversion options had a market yield of 8%. Interest is payable annually. Outstanding options permitting the holder to buy 5,000 common shares in 20X6 or later for $44 per share. Assume that Hominem Inc. had a loss on discontinued operations of $1,180,000 (after tax). Required: Compute diluted EPS on continuing operations. (Do not round intermediate calculations and round your answer to 2 decimal places.) PLEASE INCLUDE EVERY STEP, THANK YOU
Hominem Inc. has 100,000 common shares outstanding. Earnings from continuing operations amounted to $1,680,000 (after tax) for the year ended 31 December 20X4. Hominem’s income tax rate is 25%. The company had no discontinued operations. At the end of 20X4, the market price of the company’s common shares was $36. Hominem had these additional components in its capital structure at the end of the year: 24,000 cumulative
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
