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Mize Co (Morton): Calculate Diluted Earnings Per Share

On January 2, 2011, Mize Co. (Morton) issued at par $300,000 of 9% convertible bonds. Each $1,000 bond is convertible into 30 shares. No bonds were converted during 2007. Mize had 50,000 shares of common stock outstanding during 2011. Mize 's 2011 net income was $160,000 and the income tax rate was 30%. What would Mize's diluted earnings per share for 2011 be (rounded to the nearest penny)?

Solution Preview

First calculate the no of common shared for diluted EPS calculations
No of common stocks = 50,000
Shares on conversion of convertible bonds = ...

Solution Summary

This post shows how to calculate diluted earnings per share.