Calculate the Incremental EPS for the Following Instrument A)$030
B)$0

question 94

Multiple Choice

Calculate the incremental EPS for the following instrument: $\begin{array}{|l|r|}\hline\text { Face value of } 10,000 \text { preferred shares with } & \\\text { dividend rate of } 5 \% & \$ 5,000,000 \\\hline \text { Conversion rate for each preferred share } & 25 \text { ordinary shares } \\\hline \text { Income tax rate } & 30 \%\\\hline\end{array}$

• A)$0.30
• B)$0.70
• C)$1.00
• D)$2.00

---

Definitions:

Socially Optimal

A condition or point at which the social welfare is maximized, considering the benefits and costs to society as a whole.

Regulatory Commission

A government agency responsible for controlling and supervising specific industries to enforce standards and laws for public safety and welfare.

Natural Monopolist

A single supplier that can serve the entire market at a lower cost than two or more competing suppliers.

Maximum Price

A price ceiling set by the government to prevent prices from soaring to levels that are too high for most consumers to afford.