Question
4. The following information was taken from the books and records of Apple, Inc.: ...
4. The following information was taken from the books and records of Apple, Inc.:
Net income $ 270,000
Capital structure:
a. Convertible 5% bonds. Each of the 300, $1,000 bonds is convertible
into 50 shares of common stock at the present date and for the next 10 years.
b. $1 par common stock, 40,000 shares issued and outstanding
during the entire year.
c. Stock options outstanding to buy 11,000 shares of common stock
at $27 per share.
Other information:
a. Bonds converted during the year None
b. Income tax rate 30%
c. Convertible debt was outstanding the entire year
d. Average market price per share of common stock during the year $30
e. Options were outstanding the entire year
f. Options exercised during the year None
Compute basic earnings per share. (2 points)
Compute the diluted earnings per share. (5 points)
Homework Answers
Answer #1
The answer has been presenetd in the supporting sheet. For detailed answer refer to the supporting sheet.
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