On January 1, 2025, Nash Company issued 10-year, $1,810,000 face value, 6% bonds, at par. Each...

Transcribed Image Text:

On January 1, 2025, Nash Company issued 10-year, $1,810,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Nash common stock. Nash's net income in 2025 was $403,200, and its tax rate was 20%. The company had 96,000 shares of common stock outstanding throughout 2025. None of the bonds were converted in 2025. a. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share $ b. Compute diluted earnings per share for 2025, assuming the same facts as above, except that $960,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Nash common stock. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share $ On January 1, 2025, Nash Company issued 10-year, $1,810,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Nash common stock. Nash's net income in 2025 was $403,200, and its tax rate was 20%. The company had 96,000 shares of common stock outstanding throughout 2025. None of the bonds were converted in 2025. a. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share $ b. Compute diluted earnings per share for 2025, assuming the same facts as above, except that $960,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Nash common stock. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share $

Answer rating: 100% (QA)

a To compute diluted earnings per share EPS for 2025 we need to consider the potential conversion of the convertible bonds into common shares Given Fa... View the full answer