On january 2, 2018, worth co. issued at par $2,000,000 of 7% convertible bonds each $1,000 bond is convertible into 10 shares of common stock. no bonds were converted during 2018. worth had 200,000 shares of income stock outstanding during 2018, worth's 2018 net income was $900,000 and the income tax rate was 30%. worth's diluted earnings per share for 2018 would be (rounded to the nearest penny): $5.00. $4.54. $4.50. $4.72.

$4.54

Explanation:

Diluted earning per share = Adjusted net income/Adjusted shares

Adjusting net income = 900000 + (2000000*7%*70%)

                                    = 998000

Adjusted shares = 200000 + (2000000*10/1000)

                           = 220000

Diluted earning per share = 998000/220000

                                           = $4.54

Therefore,  Worth's diluted earnings per share for 2018 would be $4.54

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