Reference no: EM132584176

Swifty Corporation had net income for the current fiscal year of $800,000, and common shares outstanding of 80,000. There were no changes to Swifty's common shares during the year. Swifty also had outstanding a $1,000,000, 9% bond sold in a previous year that was convertible to 70,000 common shares. In addition, Swifty sold a new bond on October 1 of the current year. The new bond was a $1,000,000, 12% bond, convertible to 64,200 shares. Swifty was subject to a tax rate of 28%. (For simplicity, ignore the requirement to record the debt and equity portions of the convertible bond separately).

Question 1: Calculate Swifty's basic earnings per share.(Round answer to 2 decimal places, e.g. 15.25.)

Question 2: Calculate the after-tax interest paid on the 9% bonds.

Question 3: Determine an incremental per share effect for 9% bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.)

Question 4: Calculate the after-tax interest paid on the 12% bonds.

Question 5: Determine an incremental per share effect for 12% bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.)