A convertible bond issue should be included in the diluted earnings per share computation as if the bonds had been converted into common stock

A convertible bond issue should be included in the diluted earnings per share computation as if the bonds had been converted into common stock, if the effect of its inclusion is

Dilutive Antidilutive


a. Yes Yes
b. Yes No
c. No Yes
d. No No


Answer: yes no

When computing diluted earnings per share, convertible bonds are

a. ignored.
b. assumed converted whether they are dilutive or antidilutive.
c. assumed converted only if they are antidilutive.
d. assumed converted only if they are dilutive.


Answer: assumed converted only if they are dilutive

Dilutive convertible securities must be used in the computation of

a. basic earnings per share only.
b. diluted earnings per share only.
c. diluted and basic earnings per share.
d. none of these.


Answer: diluted earnings per share only