Question

Hughes Technology has had net income of $450,000 in the current fiscal year. There are 100,000 shares of common stock outstanding along with convertible bonds, which have a total face value of $1.2 million. The $1.2 million is represented by 1,200 different $1,000 bonds. Each $1,000 bond pays 6 percent interest. The conversion ratio is 20. The firm is in a 30 percent tax bracket.
a. Calculate Hughes’s basic earnings per share.
b. Calculate Hughes’s diluted earnings per share.



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  • CreatedJuly 26, 2013
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