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9. For 2021, Warren Corp. had net income of $5,000,000 and a weighted-average number of common shares issued and outstanding of 100,000 shares. The company
9. For 2021, Warren Corp. had net income of $5,000,000 and a weighted-average number of common shares issued and outstanding of 100,000 shares. The company also has $2,000,000 face value convertible bonds that were issued several years ago at a discount. The bonds' carrying value at the start of this year was $1,900,000, and interest is paid annually at the end of the year. The face rate on the bonds is 2% compounded annually, and their effective interest rate is 4% compounded annually. The bonds are convertible into 20,000 shares of $5 par common stock. No bonds were converted in 2021. The company has a tax rate of 30%. Rounding to the nearest penny, what should be Warrens diluted EPS for 2021? A. $41.89 B. $50.53 C. $41.86 D. $42.11 E. $42.13
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