Question: Given the following data, compute diluted earnings per share: Common stock (500,000 shares at $4.00 par value)................................. $2,000,000 Convertible debentures at 7 percent (6,000 bonds

Given the following data, compute diluted earnings per share:

Common stock (500,000 shares at $4.00 par value)................................. 

$2,000,000

Convertible debentures at 7 percent (6,000 bonds 

at $1,000 each; convertible into 20 shares per bond)......................................................... 

 6,000,000

Retained earnings..................................................................................... 

 8,000,000

Earnings before interest and taxes............................................................ 

 3,420,000

Interest...................................................................................................... 

 420,000

Earnings before taxes................................................................................ 

 3,000,000

Earnings after taxes (50%)........................................................................ 

$1,500,000

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