(a) diluted EPS for 2020
Earnings = $19500-9500 = $10,000
EAT =10,000*80% = 8000
No. Of shares outstanding + convertible shares
= 1600+ (60*100)
= 1600+6000= 7600
Diluted EPS = EAT/no.of shares outstanding
= 8000/7600 = 1.05
(b) diluted EPS
Outstanding shares + convertible bonds
= 1600+(6000*4/12)
=1600+2000 = 3600
Diluted EPS = $8000/3600 = 2.22
(c) outstanding shares + convertible bonds = 1600+ (20*100*6/12) + 40*100 +20*100*6/12
=3600 + 5000 =8600 shares
Diluted EPS = $8000/8600 = 0.93
In 2019, Sarasota Enterprises issued, at par, 60 $1,000, 8% bonds, each convertible into 100 shares...
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