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

question 30

Essay

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 issued on May 1.Each 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%.
Instructions: Write the EPS formula.Show all computations used in your solution.

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Definitions:

Brazilian Ethanol

Ethanol fuel produced in Brazil, primarily from sugarcane, used as a biofuel alternative to gasoline.

Consumer Surplus

The difference between the maximum price consumers are willing to pay for a product and the actual price they pay, reflecting consumer gain.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service versus what they actually receive.

Japanese Imports

Goods or services brought into another country from Japan for commercial purposes or consumption.