Question 2 A financial manager has collected the following information about a company during the financial...

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Question 2 A financial manager has collected the following information about a company during the financial auditing: 100,000 common shares outstanding from the beginning of the year. Earnings of $125,000. 1,000, 7%, $1,000 par bonds convertible into 25 shares each, outstanding as of the beginning of the year. Assume the tax rate is 40%. (a) What is the company's basic earnings per share? (5 marks) (b) What is the company's diluted earnings per share? (15 marks) Question 2 A financial manager has collected the following information about a company during the financial auditing: 100,000 common shares outstanding from the beginning of the year. Earnings of $125,000. 1,000, 7%, $1,000 par bonds convertible into 25 shares each, outstanding as of the beginning of the year. Assume the tax rate is 40%. (a) What is the company's basic earnings per share? (5 marks) (b) What is the company's diluted earnings per share? (15 marks)