Spassignments/6850184 User Dushboard Mal braWive Litcary Oitest bark or adva At

Question

Spassignments/6850184 User Dushboard Mal braWive Litcary Oitest bark or adva At Decembe 31, 20 C Amgen Kieso, Intermediate Account Hee I S Brief Exercise 16-13 Your answer is incorrect. Try agair. Marin Corporation Ale outstandre a,ea earned net income of S250,000 in 2017 and had 96 000 shares of common stock outstanang theoughout the are convertible into 18,000 shares of common. Marin's tax rate is 40 percent. was S830.000 of 9% bonds, Ohich Marin's 2017 diluted earnings per share (Roand ansiwer to 2 decimal places, e.g. a.ss.) Diluted earmings per share 29008

Explanation / Answer

The conversion of bonds would have eliminated 74,700 (830,000*9%) in interest expense. But, would have increased taxes by 29,880 (74,700*40%). So the net savings is 74,700 - 29,880 = 44,820.

Earnings = 250,000+44,820 = 294,820

Shares = 96,000+18,000 = 114,000

Diluted Earnings per share = 294,820 / 114,000 = 2.59

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