Simon Corporation issued 10-year, $5,000,000 par, 7% callable


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Simon Corporation issued 10-year, $5,000,000 par, 7% callable convertible subordinated debentures on January 2, 2008.  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 35%.  Net income in 2008 was $9,500,000 and the company had 2,000,000 shares outstanding during the entire year. (a) Prepaid a schedule to compute both basic and diluted earnings per share. (b)  Discuss how the schedule would iffer if the security was convertible preferred stock. ldahlsten
posted a question · Apr 17, 2016 at 7:54pm

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