When calculating the diluted EPS in 2020, what conversion factor should they use?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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16.5 Diluted Earnings per Share
In 2017, Crandall Organic Produce issued $1,000 par value, 8% convertible bonds with a 10-year term with the following stipulations:
1. Convertible for 10 shares of $10 par value common stock if exercised between January 1, 2017, and December 31, 2018.
2. Convertible for 15 shares of $10 par value common stock if exercised between January 1, 2019, and December 31, 2021.
3. Convertible for 25 shares of $10 par value common stock if exercised between January 1, 2022, and December 31, 2024.
4. Convertible for 40 shares of $10 par value common stock if exercised between January 1, 2025, and December 31, 2026.
When calculating the diluted EPS in 2020, what conversion factor should they use?
10 shares per bond
40 shares per bond
15 shares per bond.
25 shares per bond
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Transcribed Image Text:16.5 Diluted Earnings per Share In 2017, Crandall Organic Produce issued $1,000 par value, 8% convertible bonds with a 10-year term with the following stipulations: 1. Convertible for 10 shares of $10 par value common stock if exercised between January 1, 2017, and December 31, 2018. 2. Convertible for 15 shares of $10 par value common stock if exercised between January 1, 2019, and December 31, 2021. 3. Convertible for 25 shares of $10 par value common stock if exercised between January 1, 2022, and December 31, 2024. 4. Convertible for 40 shares of $10 par value common stock if exercised between January 1, 2025, and December 31, 2026. When calculating the diluted EPS in 2020, what conversion factor should they use? 10 shares per bond 40 shares per bond 15 shares per bond. 25 shares per bond Save for Later Submit Answer
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