Calculate the Incremental EPS for the Following Instrument A)$036
B)$0

question 90

Multiple Choice

Calculate the incremental EPS for the following instrument: $$\begin{array}{l}\begin{array} {| l | r |} \hline\text { Convertible bonds outstanding, yield of } 3 \% \text { and }\\ \text { coupon rate of } 3 \% & \$ 5,000,000 \\\hline \text { Issue date } & \text { January } 1,2015 \\\hline \text { Maturity date } & \text { December } 31,2022 \\\hline \text { Conversion rate for each } \$ 1,000 \text { bond } & 25 \text { ordinary shares } \\\hline \text { Income tax rate } & 30 \% \\\hline\end{array}\end{array}$$

• A)$0.36
• B)$0.84
• C)$40.00
• D)$105,000

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Definitions:

Profit-And-Loss Financial Statement

A financial report that summarizes the revenues, costs, and expenses incurred during a specific period, usually a fiscal quarter or year, indicating the company’s profit or loss.

Statement Of Retained Earnings

A financial document that outlines the changes in retained earnings for a company over a specific period, showing how much profit is reinvested in the business or distributed to shareholders.

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time.

Income Statement

A financial document that reports a company's revenues, expenses, and profits over a specific period.