Question: could someone also explain to me why the answer wouldnt be B. why would you not add 49k* to the numerator and 20k** to the

could someone also explain to me why the answer wouldnt be B.

why would you not add 49k* to the numerator and 20k** to the demoninator.

*1M(.07)= 70k

*70k-(.30*70k)= 49K after tax interst savings

**1M/$1000 bonds (20 convertable shares) = 20k shares could someone also explain to me why the answer wouldnt be B.

On January 2,2016 , WoW Co. issued at par $1,000,000 of 7% convertible bonds. Each $1,000 bond is convertible into 20 shares of common stock. No bonds were converted during 2016. Worth had 200,000 shares of common stock outstanding during 2016. WoW's 2016 net income was $450,000 and the income tax rate was 30\%. WoW's diluted earnings per share for 2016 would be (rounded to the nearest penny)? a. $2.36 b. $2.27 c) $2.25 BerS =200.000450K=7.25 d. $2.50 Cinucuibie Bomas

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