Calculate the share effect on the incremental EPS for the following instrument: $$\begin{array}{l}
\begin{array} {| l | r |}
\hline \text { Convertible bonds outstanding, yield of } 5 \% \text { and }\
\text { coupon rate of } 5 \% & \$ 2,000,000 \
\hline \text { Issue date } & \text { January } 1,2013 \
\hline \text { Maturity date } & \text { December } 31,2020 \
\hline \text { Conversion rate for each } \$ 1,000 \text { bond } & 40 \text { ordinary shares } \
\hline \text { Income tax rate } & 25 \% \
\hline
\end{array}
\end{array}$$
A)0.63
B)1.88
C)75,000
D)80,000

Question

Calculate the share effect on the incremental EPS for the following instrument: $$\begin{array}{l}
\begin{array} {| l | r |} 
\hline \text { Convertible bonds outstanding, yield of } 5 \% \text { and }\
\text { coupon rate of } 5 \% & \$ 2,000,000 \
\hline \text { Issue date } & \text { January } 1,2013 \
\hline \text { Maturity date } & \text { December } 31,2020 \
\hline \text { Conversion rate for each } \$ 1,000 \text { bond } & 40 \text { ordinary shares } \
\hline \text { Income tax rate } & 25 \% \
\hline
\end{array}
\end{array}$$
A)0.63
B)1.88
C)75,000
D)80,000

Quizplus · Accepted Answer

The Answer of Calculate the share effect on the incremental EPS for the following instrument: $$\begin{array}{l}
\begin{array} {| l | r |} 
\hline \text { Convertible bonds outstanding, yield of } 5 \% \text { and }\
\text { coupon rate of } 5 \% & \$ 2,000,000 \
\hline \text { Issue date } & \text { January } 1,2013 \
\hline \text { Maturity date } & \text { December } 31,2020 \
\hline \text { Conversion rate for each } \$ 1,000 \text { bond } & 40 \text { ordinary shares } \
\hline \text { Income tax rate } & 25 \% \
\hline
\end{array}
\end{array}$$
A)0.63
B)1.88
C)75,000
D)80,000

Calculate the Share Effect on the Incremental EPS for the Following