Calculate the Incremental EPS for the Following Instrument: Convertible Bonds

question 54

Multiple Choice

Calculate 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)$0.94
• B)$0.75
• C)$0.31
• D)$0.25

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