On January 1, 2014, VAP Co issued at par $15,000 of its 5% bonds, convertible into 2,000 shares of VAP Co common stock. No bonds were converted during 2014.

Throughout 2014, VAP Co had 1,500 shares of common stock outstanding. The net income for 2014 was $15, 000. VAP Co tax rate is 35%.

No potentially dilutive securities other than the convertible bonds were outstanding during 2014. Show calculations to determine VAP Co (a) basic earnings per share, and (b) diluted earnings per share for 2014.

Answer rating: 100% (QA)

Basic Earnings Per Share Formula BEPS Total Net Income Preferred Dividen... View the full answer