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:

Order of Priority

The sequence or ranking used to determine the importance or urgency of different items, claims, or needs.

Claims for Debts

Demands for payment of money owed, typically arising from contracts, agreements, or credit transactions.

Domestic Support

Financial or material assistance provided within a household, often involving alimony or child support following a divorce.

Motor Vehicles

Vehicles including cars, motorcycles, trucks, buses, and others, powered by engines for transportation on public roads.