hard · Investment Banking valuation-core
A firm has $200 million in convertible bonds with a $40.00 conversion price and a 5.00% coupon. The current share price is $50.00.
Under the 'If-Converted' method for diluted EPS, what is the interest add-back to Net Income if the tax rate is 25%?
- $10.0 million
- Zero
- $5.0 million
- $7.5 million
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