Chapter 19, Problem 19.16P

EPS; convertible bonds; treasury shares

• LO19–4 through LO19–6, LO19–9

At December 31, 2018, the financial statements of Hollingsworth Industries included the following:

Net income for 2018	$560 million
Bonds payable, 10%, convertible into 36 million shares of common stock	$300 million
Common stock:
Shares outstanding on January 1	400 million
Treasury shares purchased for cash on September 1	30 million

Additional data:

The bonds payable were issued at par in 2016. The tax rate for 2018 was 40%.

Required:

Compute basic and diluted EPS for the year ended December 31, 2018.