At the beginning of the fiscal year, june 1, fox corporation had 80,000 shares of common stock outstanding. also outstanding was $200,000 of 8% convertible bonds that had been issued at $1,000 par. the bonds were convertible into 20,000 shares of common stock; however, no bonds were converted during the year. fox's tax rate is 34% and net income for the year was $107,000. diluted earnings per share of fox common stock for the fiscal year ended may 31 was

The Diluted earnings per share of Fox common stock for the fiscal year ended May 31 was $1.1756

Explanation:

The bonds were not converted during the fiscal year. The Diluted earning per share will be claculated as follows:

Diluted earning per share

= [net income available to shareholders + bond interest (1 - tax rate)] / Weighted average number of shares outstanding

= [$107000 + $200000*8%*(1 - 34%)]/(80000 + 20000)  

= [$107000 + 16000*(0.66)]/(100000)

= [117560]/(100000)

= $1.1756

Therefore, The Diluted earnings per share of Fox common stock for the fiscal year ended May 31 was $1.1756

the third answer is correct.

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