Calculate the Income Effect on the Incremental EPS for the Following

question 37

Multiple Choice

Calculate the income effect on the incremental EPS for the following instrument: $\begin{array}{|l|r|}\hline\begin{array}{l}\text { Convertible bonds outstanding, effective yield } \\\text { of } 7 \% \text { and coupon rate of } 6 \%\end{array} & \$ 2,000,000 \\\hline \text { Issue date } & \text { January 1, 2019 } \\\hline \text { Maturity date } & \text { December 31, 2018 } \\\hline \text { Conversion rate for each } \$ 1,000 \text { bond } & \text { 20 ordinary share } \\\hline \text { Income tax rate } & 25 \%\\\hline\end{array}$

• A)30,000
• B)35,000
• C)90,000
• D)105,000

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Definitions:

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A framework suggesting that effective leadership depends on three essential skills: technical, human, and conceptual.

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