During 2014, Oddie Corp

question 108

Multiple Choice

During 2014, Oddie Corp. had net income of $300,000. Included in net income was after-tax interest expense of $20,000 on convertible bonds. The $200,000 face value of convertible bonds can be converted into common stock at the rate of 200 shares per $1,000 bond. Prior to the conversion, there were 400,000 shares of common stock outstanding. The fully diluted earnings per share is

• A) $0.636
• B) $0.727
• C) $0.750
• D) not determinable because the bonds are not dilutive

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