Question

KLM Corporation had net income for the year of $720,000 and a weighted

average number of common shares outstanding during the period of
250,000 shares. The company has a convertible bond issue outstanding. The bonds were used four years ago at face ($2,000,000), carry a 7% interest rate, and are convertible into 40,000 shares of common stock. The company has a 40% tax rate. Diluted earnings per share are

Answer 1

The bonds were used four years ago at face ($2,000,000), carry a 7% interest rate, and are convertible into 40,000 shares of common stock. The company has a 40% tax rate. Diluted earnings per share are