Mirrlees Corp. has 10,000 7% bonds convertible into 30 shares per $1000 bond. Mirrlees has 1,000,000 outstanding

Question:

Mirrlees Corp. has 10,000 7% bonds convertible into 30 shares per $1000 bond. Mirrlees has 1,000,000 outstanding shares. Mirrlees has a tax rate of 40%. The average bond yield at time of issue was 10%. Compute basic earnings per share if after-tax earnings are $1,400,000.A. $0.71
B. $1.25
C. $1.33
D. $1.40