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9) On January 2, 2021, XYZ Co. issued at par $10,000 of 6% bonds convertible...

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Accounting

9) On January 2, 2021, XYZ Co. issued at par $10,000 of 6% bonds convertible in total into 1,000 shares of XYZ's common stock. No bonds were converted during 2021. Throughout 2021, XYZ had 1,000 shares of common stock outstanding. XYZ's 2021 net income was $5,000, and its income tax rate is 20%. No potentially dilutive securities other than the convertible bonds were outstanding during 2021. XYZ's diluted earnings per share for 2021 would be (rounded to the nearest penny)?

10) Convertible bonds are an example of a potentially dilutive security. For EPS purposes, the bonds are assumed converted as of the beginning of the year.

(True/False)

11) Cash dividends paid on common stock do not have an affect on EPS. (True/False)

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