SW’s basic EPS for the year is 30 cents, based on earnings of $3 million and a weighted average number of ordinary shares of 10 million. SW is subject to corporate income tax at a rate of 25%. SW has a convertible instrument that has been in issue throughout the entire financial year. The liability component at the start of the year was $5 million and is being measured at amortised cost using the effective rate of 6%. Conversion of the instrument would result in an additional 1.2 million ordinary shares being issued. Calculate the diluted EPS of SW for the year.
A、It increases.
B、It decreases.
C、It stays constant.
D、Not Sure
A、frivolous
B、rational
C、infantile
D、irresponsible
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