During the Current Year, East Corporation Had 2 Million Shares

Multiple Choice

During the current year, East Corporation had 2 million shares of common stock outstanding. Two thousand $1,000, 8% convertible bonds were issued at face amount at the beginning of the year. East reported income before tax of $3 million and net income of $1.8 million for the year. Each bond is convertible into 10 shares of common stock. What is diluted EPS (rounded) ?

A) $.90.
B) $.95.
C) $.89.
D) $.94.