The convertible bonds were issued at par on April 1, 20X1 and are convertible into Prince's...

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The convertible bonds were issued at par on April 1, 20X1 and are convertible into Prince's common stock at a ratio of 25 shares of stock to 1 bond. Prince did not have any treasury stock at December 31, 20X0 and purchased the 9,000 shares evenly throughout 20X1. The average price of the common stock for the year was $40, and the year-end price was $45. Prince Corp. also has 60,000 outstanding and exercisable qualified employee stock options. Employees obtain one share of stock for each option exercised. The exercise price for each option is $21 per share. Prince's net income for the year ended 20X1 was $292,500. Its tax rate for the year was 35% Required: 1. Compute basic EPS for the year ended December 31, 20X1. Show all computations. 2. Compute diluted EPS for the year ended December 31, 20X1. Show all computations. The convertible bonds were issued at par on April 1, 20X1 and are convertible into Prince's common stock at a ratio of 25 shares of stock to 1 bond. Prince did not have any treasury stock at December 31, 20X0 and purchased the 9,000 shares evenly throughout 20X1. The average price of the common stock for the year was $40, and the year-end price was $45. Prince Corp. also has 60,000 outstanding and exercisable qualified employee stock options. Employees obtain one share of stock for each option exercised. The exercise price for each option is $21 per share. Prince's net income for the year ended 20X1 was $292,500. Its tax rate for the year was 35% Required: 1. Compute basic EPS for the year ended December 31, 20X1. Show all computations. 2. Compute diluted EPS for the year ended December 31, 20X1. Show all computations.

Answer rating: 100% (QA)

answer 1 Basic EPS Net income 292500 Weighted average number of shares 60000 9000 69000 Basic EPS Net income Weighted average number of shares Basic EPS 292500 69000 Basic EPS 425 2 Diluted EPS Weight... View the full answer