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Calculate the Income Effect on the Incremental EPS for the Following

Question 60

Multiple Choice

Calculate the income effect on the incremental EPS for the following instrument: Convertible bonds outstanding, yield of 8% and coupon rate of 8%
$5,000,000
Issue date
January 1, 2021
Maturity date
December 31, 2028
Conversion rate for each $1,000 bond
25 ordinary shares
Income tax rate
30%


A) $0.96
B) $2.24
C) $120,000
D) $280,000

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