The following information was taken from the books andrecords of Ludwick, Incorporated 1. Net income was $419,000. nextfor capital structure a. Convertible 6% bonds. Each of the 250,$1,000 bonds are convertible into 50 shares of common stock at thepresent date and for the next 10 years. Coming to $250,000 B. $10par common stock, two hundred thousand shares issued andoutstanding during the entire year coming to 2 million dollarsC.Stock warrants outstanding to buy 14560 shares of common stock at$20 per share. Next 3. Other information: a. Bonds converted duringthe year none B. Income tax rate 30%. C. No convertible debt wasoutstanding the entire year d. Average market price per share ofcommon stock during the year was $32 e. There were no warrantsoutstanding the entire year f. There were no warrants exercisedduring the year. first compute basic earnings per share. Nextcompute diluted earnings per share needed for common stock,warrants and conversion bonds. the EPS for each
The following information was taken from the books andrecords of Ludwick, Incorporated 1. Net income was $419,000. nextfor capital structure a. Convertible 6% bonds. Each of the 250,$1,000 bonds are convertible into 50 shares of common stock at thepresent date and for the next 10 years. Coming to $250,000 B. $10par common stock, two hundred thousand shares issued andoutstanding during the entire year coming to 2 million dollarsC.Stock warrants outstanding to buy 14560 shares of common stock at$20 per share. Next 3. Other information: a. Bonds converted duringthe year none B. Income tax rate 30%. C. No convertible debt wasoutstanding the entire year d. Average market price per share ofcommon stock during the year was $32 e. There were no warrantsoutstanding the entire year f. There were no warrants exercisedduring the year. first compute basic earnings per share. Nextcompute diluted earnings per share needed for common stock,warrants and conversion bonds. the EPS for each
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The information below pertains to Larkspur Company for 2018.
| Net income for the year | $1,190,000 | |
| 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock | 1,970,000 | |
| 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock | 4,000,000 | |
| Common stock, $10 par value | 6,280,000 | |
| Tax rate for 2018 | 40% | |
| Average market price of common stock | $25 per share |
There were no changes during 2018 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 68,800 shares of common stock at $20 per share.
(a) Compute basic earnings per share for 2018.
(b) Compute diluted earnings per share for 2018
