Canada Corp -Refer to Scenario: Canada Corp

Canada Corp.A firm has $10 million of outstanding convertible bonds. The coupon on these convertibles is $100 per bond, and each bond is convertible into common stock at a conversion price of $25.The income statement of the firm before conversion is as follows and EBIT remains at $6 million after conversion. Assume the firm originally paid $2 million in interest on other outstanding debt before the convertible was issued. $\begin{array}{|l|c|}\hline & \text { Millions of Dollars before Conversion } \\\hline \text { EBIT } & 6.0 \\\hline \text { Interest } @ 10 \% & -3.0 \\\hline \text { Earnings before taxes (EBT) } & 3.0 \\\hline \text { Taxes @40\% } & -1.2 \\\hline \text { Earnings after taxes (EAT) } & 1.8 \\\hline &\\\hline \text { Shares outstanding (millions) } & 1.0 \\\hline \text { Earnings per share (EPS) } & \$ 1.80\\\hline\end{array}$
-Refer to Scenario: Canada Corp.What is the fully diluted EPS?

A) $1.57
B) $1.59
C) $1.62
D) $1.71