During the Current Year, High Corporation Had 3 Million Shares

Multiple Choice

During the current year, High Corporation had 3 million shares of common stock outstanding. Five thousand, $1,000, 6% convertible bonds were issued at face amount at the beginning of the year. High reported income before tax of $4 million and net income of $2.4 million for the year. Each bond is convertible into ten shares of common. What is diluted EPS?

A) $.85.
B) $.86.
C) $.80.
D) $.79.