On January 1, 2025, Nash Company issued 10-year, $1,810,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Nash common stock. Nash's net income in 2025 was $403,200, and its tax rate was 20%. The company had 96,000 shares of common stock outstanding throughout 2025. None of the bonds were converted in 2025. a. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share b. Compute diluted earnings per share for 2025, assuming the same facts as above, except that $960,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Nash common stock. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share
On January 1, 2025, Nash Company issued 10-year, $1,810,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Nash common stock. Nash's net income in 2025 was $403,200, and its tax rate was 20%. The company had 96,000 shares of common stock outstanding throughout 2025. None of the bonds were converted in 2025. a. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share b. Compute diluted earnings per share for 2025, assuming the same facts as above, except that $960,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Nash common stock. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:On January 1, 2025, Nash Company issued 10-year, $1,810,000 face value, 6% bonds, at par. Each $1,000 bond is convertible
into 15 shares of Nash common stock. Nash's net income in 2025 was $403,200, and its tax rate was 20%. The company
had 96,000 shares of common stock outstanding throughout 2025. None of the bonds were converted in 2025.
a. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.)
Diluted earnings per share
b. Compute diluted earnings per share for 2025, assuming the same facts as above, except that $960,000 of 6% convertible preferred
stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Nash common stock. (Round answer to
2 decimal places, e.g. 2.55.)
Diluted earnings per share
$
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