Gilkey, a hardware store in Christchurch, New Zealand, had $150,000 in convertible 6% bonds outstanding all year. Each bond has a face value of $1,000 and is convertible to 5 common shares. The corporate tax rate was 30% for Gilkey. Assume that the convertible 6% bonds have an impact of $15. Also assume that the convertible 6% bonds are the only potentially dilutive securities, and that Gilkey has a basic EPS of $(8.00). Are the convertible 6% bonds considered dilutive?

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The Answer of Gilkey, a hardware store in Christchurch, New Zealand, had $150,000 in convertible 6% bonds outstanding all year. Each bond has a face value of $1,000 and is convertible to 5 common shares. The corporate tax rate was 30% for Gilkey. Assume that the convertible 6% bonds have an impact of $15. Also assume that the convertible 6% bonds are the only potentially dilutive securities, and that Gilkey has a basic EPS of $(8.00). Are the convertible 6% bonds considered dilutive?

Gilkey, a Hardware Store in Christchurch, New Zealand, Had $150,000