On January 1, 2025, Novak Company issued 10 -year, $2,150,000 face value, 6% bonds, at par. Each
$1,000 bond is convertible into 16 shares of Novak common stock. Novak's net income in 2025 was
$518,950, and its tax rate was 20%. The company had 97,000 shares of common stock outstanding
throughout 2025. None of the bonds were converted in 2025.
a. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.)
Diluted earnings per share $
b. Compute diluted earnings per share for 2025 , assuming the same facts as above, except that
$970,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred
share is convertible into 5 shares of Novak common stock. (Round answer to 2 decimal places, e.g.
2.55.)
Diluted earnings per share $
On January 1, 2025, Novak Company issued 10-year, $2,150,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 16 shares of Novak common stock.Novak's net income in 2025 was $518,950, and its tax rate was 20%. The company had 97,000 shares of common stock outstanding throughout 2025.None of the bonds were converted in 2025
a. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.)
Diluted earnings per share
b. Compute diluted earnings per share for 2025, assuming the same facts as above, except that $970,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Novak common stock. (Round answer to 2 decimal places, e.g. 2.55.)
Diluted earnings per share