Question - The Kingbird Corporation issued 10-year, $4,630,000 par, 6% callable convertible subordinated debentures on January 2, 2017. The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is 14:1, and in 2 years it will increase to 19:1. At the date of issue, the bonds were sold at 97. Bond discount is amortized on a straight-line basis. Kingbird's effective tax was 40%. Net income in 2017 was $9,100,000, and the company had 2,090,000 shares outstanding during the entire year.
(a) Compute both basic and diluted earnings per share.