On January 1, 2019, Ventionary issued bonds with an estimated value of 10 years, $ 3,000,000 (face value), and interest of 6%. Each $ 1,000 of bond will be converted into 15 shares of common stock. Net income for 2020 is $ 240,000, at 40% tax. Interest expense on the liability component in 2020 is $ 210,000. The company has 100,000 shares in 2019. There are no bonds converted in 2019. Calculate the 2019 diluted EPS value.
On January 1, 2019, Ventionary issued bonds with an estimated value of 10 years, $ 3,000,000 (face value), and interest of 6%. Each $ 1,000 of bond will be converted into 15 shares of common stock. Net income for 2020 is $ 240,000, at 40% tax. Interest expense on the liability component in 2020 is $ 210,000. The company has 100,000 shares in 2019. There are no bonds converted in 2019. Calculate the 2019 diluted EPS value.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 1, 2019, Ventionary issued bonds with an estimated value of 10 years, $ 3,000,000 (face value), and interest of 6%. Each $ 1,000 of bond will be converted into 15 shares of common stock. Net income for 2020 is $ 240,000, at 40% tax. Interest expense on the liability component in 2020 is $ 210,000. The company has 100,000 shares in 2019. There are no bonds converted in 2019.
Calculate the 2019 diluted EPS value.
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