Calculate the Share Effect on the Incremental EPS for the Following

question 91

Multiple Choice

Calculate the share effect on the incremental EPS for the following instrument: Convertible bonds outstanding, yield of 5% and coupon rate of 5%
$2,000,000
Issue date
January 1, 2021
Maturity date
December 31, 2028
Conversion rate for each $1,000 bond
40 ordinary shares
Income tax rate
25%

• A)0.63
• B)0.94
• C)75,000
• D)80,000

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Definitions:

Population Growth

The increase in the number of individuals in a population, often measured by the percentage increase per year.

Immigration

The movement of individuals from one country to another with the intent to reside or work there, either temporarily or permanently.

Implicit Costs

The opportunity costs of using resources that are not directly paid for or billed, but represent potential income lost.

Future Earnings

Projected income or profit that an individual, company, or asset is expected to generate in the future.