During the Current Year, East Corporation Had 2 Million Shares

question 116

Multiple Choice

During the current year, East Corporation had 2 million shares of common stock outstanding. Two thousand $1,000, 8% convertible bonds were issued at face amount at the beginning of the year. East reported income before tax of $3 million and net income of $1.8 million for the year. Each bond is convertible into 10 shares of common stock. What is diluted EPS (rounded) ?

• A)$.90.
• B)$.95.
• C)$.89.
• D)$.94.

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Definitions:

Angle Of The Jaw

The angular area on either side of the face where the jawbone bends upwards towards the ear.

Endotracheal Tube

A flexible tube inserted through the mouth or nose into the trachea to maintain an open airway and deliver oxygen.

Head Tilt-chin Lift

A technique used in first aid to open the airway of an unconscious person by tilting the head back and lifting the chin.

Jaw-thrust Maneuver

An emergency procedure used to open the airway of an unconscious patient by moving the jaw forward without tilting the head or neck.