During 2016, Oddie Corp had net income of $300,000. Included in net income was after-tax interest expense of $20,000 on convertible bonds. The $200,000 face value of convertible bonds can be converted into common stock at the rate of 200 shares per $1,000 bond. Prior to the conversion, there were 400,000 shares of common stock outstanding. What is the amount of fully diluted earnings per share?
A) $0.636
B) $0.727
C) $0.750
D) not determinable because the bonds are not dilutive
B
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