Business, 12.06.2020 01:57 tluvk85

g On January 1, 2020, Marigold Company issued 10-year, $1,890,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 16 shares of Marigold common stock. Marigold’s net income in 2020 was $470,000, and its tax rate was 20%. The company had 94,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. (a) Compute diluted earnings per share for 2020.

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Answer from: tagerryawilson6

$3.78

Explanation:

The First step is to calculate basic earning per share then making the adjustments to the basic earning per share to arrive to a diluted earning per share.

Basic Earning per Share = Earnings Attributable to Holders of Common Stock / Weighted Average Number of Common Stock Holders.

Earnings Attributable to Holders of Common Stock Calculation :

Net Income $470,000

Less Bond Interest ($1,890,000×6%×80%) ($90,720)

Earnings Attributable to Holders of Common Stock $379,280

Weighted Average Number of Common Stock Holders Calculation :

Outstanding Common Shares 94,000

Weighted Average Number of Common Stock Holders 94,000

Basic Earning per Share = $379,280 / 94,000 = $4.03

Diluted Earnings per Share = Adjusted Earnings Attributable to Holders of Common Stock / Adjusted Weighted Average Number of Common Stock Holders.

Adjusted Earnings Attributable to Holders of Common Stock Calculation :

Earnings Attributable to Holders of Common Stock $379,280

Add Back Bond Interest ($1,890,000×6%×80%) $90,720

Adjusted Earnings Attributable to Holders of Common Stock $470,000

Adjusted Weighted Average Number of Common Stock Holders.

Outstanding Common Shares 94,000

Add Convertible Bonds ($1,890,000/$1,000×16) 30,240

Adjusted Weighted Average Number of Common Stock Holders 124,240

Diluted Earnings per Share = $470,000 / 124,240 = $3.78

Answer from: Quest

B. false hope it ! : )

Answer from: Quest

you have to put the parentheses like this:

$(85-4) \div 9 \times 10$

in fact, you have to perform the operation inside parentheses first, and then proceed in order:

$81 \div 9 \times 10 = 9 \times 10 = 90$

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g On January 1, 2020, Marigold Company issued 10-year, $1,890,000 face value, 6% bonds, at par. Each...

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