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  • 1.  Diluted Earning Per Share

    Posted 10-24-2013 12:55 PM
    Hi to All,

    I am not sure why the answer for the following question is 2.11, I appreciate if someone can help.
    The Dwyer Company balance sheet indicates that the company has $2,000,000 of 7.5% convertible bonds, $1,000,000 of 9% preferred stock, par value $100, and $1,000,000 common stock, par value $10. The company reported net income of $317,000. The bonds can be converted into 50,000 common shares. The income tax rate is 36%. Which one of the following would Dwyer report as diluted earnings per share?
     

    Regards
    Mohamed

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    Mohamed Mohamed
    Controller
    Four Seasons Cairo at The First Residence
    Cairo
    Egypt
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  • 2.  RE:Diluted Earning Per Share

    Posted 10-24-2013 02:32 PM
    I am coming up with 2.15. 

    317,000 - 90,000+ 96000
    100,000 + 50,000

    Good question. I come up with 2.11 when calculating with a 36.33% tax rate..

    317,000 - 90,000 + 95,500
    100,000+50,000

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    Bradley Hughes
    Accountant
    Floratine Products Group
    Memphis TN
    United States
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