Medley Co. reported net income for 2021 of $420,000. The company has 200,000 shares of...
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Medley Co. reported net income for 2021 of $420,000. The company has 200,000 shares of $10 par value common stock that was issued and outstanding all year. The capital structure of the company consists of the following: 300 convertible 6% bonds, each with a face value of $1,000 and each convertible into 50 shares of common stock. Stock warrants to buy 16,000 shares of common stock at $20 per share. None of the bonds were converted during the year and none of the warrants were exercised during the year. The average market price of the company's common stock during the year was $32 per share. The applicable income tax rate is 30%. a. What is Medley Co's basic earnings per share for 2021 (rounded to the nearest cent)? b. What is Medley Co's diluted earnings per share for 2021 (rounded to the nearest cent)?
Medley Co. reported net income for 2021 of $420,000. The company has 200,000 shares of $10 par value common stock that was issued and outstanding all year. The capital structure of the company consists of the following:
300 convertible 6% bonds, each with a face value of $1,000 and each convertible into 50 shares of common stock.
Stock warrants to buy 16,000 shares of common stock at $20 per share.
None of the bonds were converted during the year and none of the warrants were exercised during the year. The average market price of the company's common stock during the year was $32 per share. The applicable income tax rate is 30%.
a. What is Medley Co's basic earnings per share for 2021 (rounded to the nearest cent)?
b. What is Medley Co's diluted earnings per share for 2021 (rounded to the nearest cent)?
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