On January 1, 2010, Lindsey Company issued 10-year, $3,000,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Lindsey common stock. Lindsey's net income in 2011 was $240,000, and its tax rate was 40%. The company had 100,000 shares of common stock outstanding throughout 2010. None of the bonds were converted in 2010. (Round answers to 2 decimal places, e.g. 2.40.)
Compute diluted earnings per share for 2010.
Compute diluted earnings per share for 2010 using the same facts as those assumed for part (a), except that $1,000,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Lindsey common stock.