Calculate the Income Effect on the Incremental EPS for the Following

question 42

Multiple Choice

Calculate the income effect on the incremental EPS for the following instrument: Face value of 50,000 preferred shares with dividend rate of 5%
$5,000,000
Conversion rate for each preferred share
5 ordinary shares
Income tax rate
30%

• A)$1.00
• B)$75,000
• C)$175,000
• D)$250,000

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Definitions:

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