Horne Engineering Corp

question 98

Multiple Choice

Horne Engineering Corp.has 30,000 6.0% bonds convertible into 30 shares per $1,000 bond.Horne Engineering has 500,000 outstanding shares and a tax rate of 35%.Compute (basic) earnings per share if after-tax earnings are $750,000 and diluted EPS when bonds are converted.

• A) $1.82 basic,$1.50 diluted
• B) $1.50 basic,$1.37 diluted
• C) $3.30 basic,$1.18 diluted
• D) $1.26 basic,$0.98 diluted

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