On January 1, 2019, Sasha Inc issued 10-year, P3,000,000 face value, 6% bonds, at par. Each P1,000 bond is convertible into 15 ordinary shares of Sasha’s. Sasha’s net income for 2019 was P240,000, and its tax rate was 40%. Interest expense on the liability component in 2019 was P210,000. The company had 100,000 ordinary shares outstanding throughout 2019. None of the bonds were converted in 2019. 1. Compute the diluted earnings per share for 2019. 2. Compute the diluted earnings per share for 2019 assuming the same facts as above, except that P1,000,000 of 6% convertible preference shares were issued instead of the bonds. Each P100 preference share is convertible into 5 ordinary shares of Sasha’s.
On January 1, 2019, Sasha Inc issued 10-year, P3,000,000 face
1. Compute the diluted earnings per share for 2019.
2. Compute the diluted earnings per share for 2019 assuming the same facts as above, except that P1,000,000 of 6% convertible preference shares were issued instead of the bonds. Each P100
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