The Sweet Corporation issued 10-year, $4,890,000 par, 7% callable convertible subordinated debentures on January 2, 2017. 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 16:1. At the date of issue, the bonds were sold at 96. Bond discount is amortized on a straight-line basis. Sweet’s effective tax was 35%. Net income in 2017 was $8,550,000, and the company had 1,980,000 shares outstanding during the entire year.

(a) Compute both basic and diluted earnings per share. (Round answers to 2 decimal places, e.g. $2.55.)

Basic Earnings per share? $_____

Diluted Earnings per share? $____

Answer rating: 100% (QA)

To calculate both basic and diluted earnings per share EPS we need to determine the weighted average ... View the full answer