Calculate the Incremental EPS for the Following Instrument A)188
B)0

question 22

Multiple Choice

Calculate the incremental EPS for the following instrument: $$\begin{array}{l}\begin{array} {| l | r |} \hline\text { Convertible bonds outstanding, yield of } 5 \% \text { and }\\ \text { coupon rate of } 4 \% & \$ 2,000,000 \\\hline \text { Issue date } & \text { January } 1,2013 \\\hline \text { Maturity date } & \text { December } 31,2020 \\\hline \text { Conversion rate for each } \$ 1,000 \text { bond } & 40 \text { ordinary shares } \\\hline \text { Income tax rate } & 25 \% \\\hline\end{array}\end{array}$$

• A)1.88
• B)0.75
• C)0.31
• D)0.25

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Definitions:

Economic Decisions

Choices made by individuals, businesses, or governments based on the allocation of scarce resources with the aim of maximizing benefits and minimizing costs.

Economic Activities

Economic activities encompass all actions that involve the production, distribution, and consumption of goods and services within an economy.

Ethical Conduct

The practice of behaving in a manner that is considered morally right, fair, and appropriate in a given context, especially in professional settings.

Manufacturing

The process of producing goods from raw materials through various processes, machinery, and operations, typically in a factory setting.