Given the following data, compute diluted earnings per share. (Diluted Earnings per share = Adjusted Earnings After Taxes / Shares Outstanding + All convertible securities) Common Stock (500,000

Given the following data, compute diluted earnings per share.

(Diluted Earnings per share = Adjusted Earnings After Taxes / Shares Outstanding + All convertible securities)

Common Stock (500,000 shares at $5 par) $2,500,000

8% convertible debentures (5,000 bonds at $1,000 each) 5,000,000

Retained Earnings 5,000,000

Earnings before interest and taxes 2,800,000

Interest 400,000

Earnings before taxes 2,400,000

Earnings after taxes (50%) $1,200,000

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