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Calculate the Incremental EPS for the Following Instrument: Convertible Bonds

Question 54

Multiple Choice

Calculate the incremental EPS for the following instrument: Convertible bonds outstanding, yield of 5% and coupon rate of 5%
$2,000,000
Issue date
January 1, 2021
Maturity date
December 31, 2028
Conversion rate for each $1,000 bond
40 ordinary shares
Income tax rate
25%


A) $0.94
B) $0.75
C) $0.31
D) $0.25

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