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Executrain Has 50,000, 7%, Bonds Outstanding for the Second Half

Question 79

Multiple Choice

Executrain has 50,000, 7%, bonds outstanding for the second half of the year. Each $1,000 bond, sold July 1 at par, is convertible into 10 shares of common stock. The corporate tax rate is 40%. What is the incremental income per common share from the convertible bonds?


A) $7.00
B) $2.10
C) $6.00
D) $4.20

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