Question

Manchester Corporation had 100,000 shares of common stock outstanding and 5% bonds with a face value of $1,000,000 outstanding throughout the current year. The bonds are convertible into 150,000 common shares. Net income for the current year was $212,500 with a 25% tax rate. What is the amount of the diluted EPS for the current year

Answer 1

$.6375

Step-by-step explanation:

Diluted EPS=Net Income /(Weighted Average shares + any convertible securities )

=$212,500*(1-25%)/(100,000+150,000)

=$.6375