Online Network Inc. has a net income of $650,000 in the current fiscal year. There are 100,000

Question:

Online Network Inc. has a net income of $650,000 in the current fiscal year. There are 100,000 shares of outstanding, along with convertible bonds, which have a total 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.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...