Question: The company had 50,000 shares of common stock outstanding throughout the year. In addition, as of January 1, the company had issued 100 convertible bonds

The company had 50,000 shares of outstanding throughout the year. In addition, as of January 1, the company had issued 100 convertible bonds ($1,000 face value, 10%). The company has no other potentially dilutive securities. Net income for the year was $100,000. The income tax rate is 30%. Compute diluted earnings per share, assuming that
(1) Each bond was convertible into 50 shares of Each bond was convertible into 20 shares of common stock.

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