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The information below pertains to Pearl Company for 2026. Net income for the year 5% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 60 shares of common stock 4% convertible, cumulative preferred stock, $100 par value; each share is convertible into 4 shares of common stock Common stock, $1 par value Tax rate for 2026 $8,200,000 5,470,000 2,580,000 9,520,000 20%

The information below pertains to Pearl Company for 2026. Net income for the year 5% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 60 shares of common stock 4% convertible, cumulative preferred stock, $100 par value; each share is convertible into 4 shares of common stock Common stock, $1 par value Tax rate for 2026 $8,200,000 5,470,000 2,580,000 9,520,000 20%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The information below pertains to Pearl Company for 2026. Net income for the year 5% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 60 shares of common stock 4% convertible, cumulative preferred stock, $100 par value; each share is convertible into 4 shares of common stock Common stock, $1 par value Tax rate for 2026 Average market price of common stock Basic earnings per share $ 0.84 (b) Compute diluted earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share $ $8,200,000 5,470,000 2,580,000 There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 114,000 shares of common stock at $12 per share. (a) Compute basic earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.) 9,520,000 20% $19 per share
Transcribed Image Text:The information below pertains to Pearl Company for 2026. Net income for the year 5% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 60 shares of common stock 4% convertible, cumulative preferred stock, $100 par value; each share is convertible into 4 shares of common stock Common stock, $1 par value Tax rate for 2026 Average market price of common stock Basic earnings per share $ 0.84 (b) Compute diluted earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share $ $8,200,000 5,470,000 2,580,000 There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 114,000 shares of common stock at $12 per share. (a) Compute basic earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.) 9,520,000 20% $19 per share
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