The Carla Corporation issued 10-year, $5,060,000 par, 7%callable convertible subordinated debentures on January 2, 2020.The bonds have
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The Carla Corporation issued 10-year, $5,060,000 par, 7%callable convertible subordinated debentures on January 2, 2020.The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is 14:1, and in 2 years it will increase to 18:1. At the date of issue, the bonds were sold at99. Bond discount is amortized on a straight-line basis. Carla’s effective tax was 20%. Net income in 2020 was $11,200,000, and the company had 1,815,000 shares outstanding during the entire year.
Compute both basic and diluted earnings per share.
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Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
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