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Kansas Instruments Reported $7,000,000 in Net Income for the Current

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Kansas Instruments reported $7,000,000 in net income for the current year. The company had $7,000,000 of 9% cumulative, non-convertible preferred stock outstanding all year, and issued $5,000,000 of 7% convertible bonds on May 1. Each $1,000 bond is convertible into 40 shares of common stock. Common shares outstanding all year were 2,000,000. Compute both basic and diluted EPS when the tax rate is 40%.


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