Calculate the Income Effect on the Incremental EPS for the Following

question 38

Multiple Choice

Calculate the income effect on the incremental EPS for the following instrument: Convertible bonds outstanding, yield of 6% and coupon rate of 6%
$2,000,000
Issue date
January 1, 2021
Maturity date
December 31, 2028
Conversion rate for each $1,000 bond
20 ordinary shares
Income tax rate
25%

• A)0.75
• B)2.25
• C)40,000
• D)90,000

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Definitions:

Administering Medication

The process of properly giving medication to a patient, ensuring the right drug, dose, and method are used.

Ethnopharmacology

The study of the effect of ethnicity on responses to prescribed mediation.

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A class of drugs used primarily to treat hypertension and congestive heart failure by relaxing blood vessels.

Decreased Response

A reduction in the effectiveness or intensity of a reaction or behavior typically observed in biological, chemical, or social processes.