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You are given the following information The firm has 200,000 shares outstanding for the entire year....

You are given the following information The firm has 200,000 shares outstanding for the entire year. It had net income of 250,000. It also had 2,000 7%, 1,000 Par- value bonds convertible into 25 shares of common each. The firm's tax rate is 40%. The firm has no preferred stock. What is fully diluted EPS

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Answer #1

Α Hmm Net income Add: Interest net of tax Adjusted Income 250000 84000 334000 6 7 9 10 11 No of shares Add: Potential equity

ovou wn Net income Add: Interest net of tax Adjusted Income 250000 =2000*1000*7%*(1-40%) =SUM(C4:05) No of shares Add: Potent

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