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5. The following information was taken from the books and records of Simonic, Inc.: (i)...

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Accounting

5. The following information was taken from the books and records of Simonic, Inc.: (i) Net Income $ 560,000 (ii) Capital structure: (a) Convertible 6% 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. $ 300,000 (b) $10 par common stock, 200,000 shares issued and outstanding during the entire year. $2,000,000 (c) Stock options outstanding to buy 16,000 shares of common stock at $20 per share. (iii) Other information: (a) Bonds converted during the year NONE (b) Income tax rate 30% (c)Average market price per share of common stock during year $32 (d) Warrants were outstanding the entire year (e) Warrants exercised during the year NONE REQUIRED: (a) Is the capital structure simple or complex? Explain. (b) Compute basic earnings per share. (c) Compute diluted earnings per share.

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