Veres Inc.s net income is $120,000 and its weighted average common shares outstanding is 12,000. Veres Inc. has $1,000,000, 8%, 10 year convertible bonds, which were issued two years ago at a premium. This premium is amortized by $20,000 per year. Each $1,000 bond is convertible to 20 common shares. Corporate income tax rate is 20%. What is Veres Inc.s diluted EPS for the year rounded to the nearest dollar?

a.

$5

b.

$7

c.

$9

d.

$6

e.

$10