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Vickrey Technology has had net income of $2,000,000 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 8,000 different $1,000 bonds. Each $1,000 bond pays 3% interest. The conversion ratio is 30. The firm is in a 30% tax bracket. What is Vickrey's diluted earnings per share?

a) $1.75

b) $1.81

c) $2.00

d) none of the above

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M947432

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