Question

Which item is not an accurate representation of the impact of convertible bonds on the computation of EPS? Multiple Choice O A convertible bond's net of tax interest expense is added back to not come when determining dived earnings per share only the bond is known to be dire Convertible bonds that were outstanding during the entire year will not have an impact on the weighted werage number of common shares outstanding used in the calculation of basic caminos per share Current GAAP requires that convertible bonds should only be considered as a converted for dived earnings per share the share price is more than the conversion price, the convertible bonds have an antidhtive effect they are ignored in the computation of dised EPs.

Answer 1

on whether they The actual effect on reported Earnings per share (Eps) depends are considered to be common stock Equivalents are equivalent , the convertible bonds are used in and fully diluted EPS If they are not considered Equivalent, they are included only in If they calculating both both primary the fully diluted EPS So, Item that is not an accurate representation of the impact of convertible bonds on the computation of EPS. is current GAAP requires that convertible bonds should only be considered as if reconverted for diluted Earnings per share if the share price than the price. conversion is moyo option 3 is correct