Question

Online Network Inc. has a net income of $650,000 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 $1.6 million. The $1.6 million is represented by 1,600 different $1,000 bonds. Each $1,000 bond pays 6 percent interest. The conversion ratio is 10. The firm is in a 30 percent tax bracket.
a. Compute basic earnings per share.
b. Compute diluted earnings per share.



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  • CreatedOctober 14, 2014
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