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Earnings Per Share Complex Capital Structure E15.24.a. Prepare a schedule to compute both basic and...

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Earnings Per Share Complex Capital Structure E15.24.a. Prepare a schedule to compute both basic and diluted EPS. Solution: Earnings Per Share Complex Capital Structure E15.24. The Simon Corporation issued 10-year, \$5,000,000 par, 7% callable convertible subordinated debentures on January 2,2025 . The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is 14:1, and in 2 years it will increase to 18:1. At the date of issue, the bonds were sold at 98 . Bond discount is amortized on a straight-line basis. Simon's effective tax was 20%. Net income in 2025 was $9,500,000, and the company had 2,000,000 shares outstanding during the entire year. Earnings Per Share Complex Capital Structure E15.24.a. Sol. (contd.) E15.24.b. Discuss how the schedule would differ if the security was convertible preferred stock. Solution: Assuming no preferred dividends declared and the preferred was noncumulative Basic EPS: Diluted EPS

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