Calculate the share effect on the incremental EPS for the following instrument: Face value of 50,000 preferred shares with dividend rate of 5%
$5,000,000
Conversion rate for each preferred share
5 ordinary shares
Income tax rate
30%
A)5
B)25,000
C)50,000
D)250,000

Question

Quizplus · Accepted Answer

The share effect on incremental EPS is calculated by multiplying the number of preferred shares by the conversion rate: 50,000 shares * 5 ordinary shares = 250,000 ordinary shares.

Calculate the Share Effect on the Incremental EPS for the Following