Vickrey Technology Has Had Net Income of $1,500,000 in the Current

question 80

Multiple Choice

Vickrey Technology has had net income of $1,500,000 in the current fiscal year. There are 1,000,000 shares of common stock outstanding along with convertible bonds, which have a total face value of $8 million. The $8 million is represented by 5,000 different $1,000 bonds. Each $1,000 bond owes and pays 4% interest. The conversion ratio is 30. The firm is in a 21% tax bracket. What is Vickrey's "diluted earnings per share?"

• A) $1.44
• B) $1.81
• C) $2.00
• D) $1.30

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