Calculate the Share Effect on the Incremental EPS for the Following

question 4

Multiple Choice

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

• A)5
• B)25,000
• C)50,000
• D)250,000

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