Question:
Cook Company has net income of $200,000 for 2009 and a weighted average number of shares outstanding of 100,000 shares for 2009.
Cook Company also had a 6% convertible bond outstanding with a face value of $100,000. Interest is payable annually. These bonds were issued to yield 6%. The bond is convertible into 20,000 share of common stock. Tax rate for Cook company is 40%.
Calculate the Earnings per share and diluted earnings per share. I need help solving this problem.