Vickrey Technology has had net income of $1,500,000 in the current fiscal year. There are 1,000,000 shares of common stock outstanding along with convertible bonds, which have a total face value of $8 million. The $8 million is represented by 5,000 different $1,000 bonds. Each $1,000 bond owes and pays 4% interest. The conversion ratio is 30. The firm is in a 21% tax bracket. What is Vickrey's "diluted earnings per share?" A. $1.44 B. $1.81 C. $2.00 D. $1.30

Vickrey Technology has had net income of $1,500,000 in the current fiscal year. There are 1,000,000 shares of common stock outstanding along with convertible bonds, which have a total face value of $8 million. The $8 million is represented by 5,000 different $1,000 bonds. Each $1,000 bond owes and pays 4% interest. The conversion ratio is 30. The firm is in a 21% tax bracket. What is Vickrey's "diluted earnings per share?" A. $1.44 B. $1.81 C. $2.00 D. $1.30

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 15P

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