Tamarisk Corporation issued 20-year, $10,500,000 face value, 9% convertible debentures on January 1, 2020. The bonds have a par value of $1,000, with interest payable semiannually. The initial conversion ratio is 10:1, and in 3 years it will increase to 12:1. At the date of issue, the bonds were sold at 105. Bond premium is amortized on a straight-line basis. Tamarisk's effective tax rate was 40%. Net income in 2020 was $27,060,000, and the company had 12,800,000 common shares issued and outstanding during the entire year. Compute both basic and diluted earnings per share. (Round answers to 2 decimal places, e.g. 2.55.) Basic earnings per share 2.11 Diluted earnings ner share
Tamarisk Corporation issued 20-year, $10,500,000 face value, 9% convertible debentures on January 1, 2020. The bonds have a par value of $1,000, with interest payable semiannually. The initial conversion ratio is 10:1, and in 3 years it will increase to 12:1. At the date of issue, the bonds were sold at 105. Bond premium is amortized on a straight-line basis. Tamarisk's effective tax rate was 40%. Net income in 2020 was $27,060,000, and the company had 12,800,000 common shares issued and outstanding during the entire year. Compute both basic and diluted earnings per share. (Round answers to 2 decimal places, e.g. 2.55.) Basic earnings per share 2.11 Diluted earnings ner share
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Tamarisk Corporation issued 20-year, $10,500,000 face value, 9% convertible debentures on January 1, 2020. The bonds have a par
value of $1,000, with interest payable semiannually. The initial conversion ratio is 10:1, and in 3 years it will increase to 12:1. At the
date of issue, the bonds were sold at 105. Bond premium is amortized on a straight-line basis. Tamarisk's effective tax rate was 40%.
Net income in 2020 was $27,060,000, and the company had 12,800,000 common shares issued and outstanding during the entire
year.
Compute both basic and diluted earnings per share. (Round answers to 2 decimal places, e.g. 2.55.)
Basic earnings per share
$
2.11
Diluted earnings per share
$
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