Shipley Corporation Had Net Income for the Year of $600,000

question 140

Multiple Choice

Shipley Corporation had net income for the year of $600,000 and a weighted average number of common shares outstanding during the period of 250,000 shares. The company has a convertible bond issue outstanding. The bonds were issued four years ago at par ($2,500,000) , carry a 7% interest rate, and are convertible into 50,000 shares of common stock. The company has a 40% tax rate. Diluted earnings per share are

• A) $1.65
• B) $2.23.
• C) $2.35.
• D) $2.58.

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