Which Statement Is Correct

question 47

Multiple Choice

Which statement is correct?

• A)Diluted EPS assumes that all dilutive securities are converted.
• B)Diluted EPS assumes that all anti-dilutive and dilutive securities are converted.
• C)Diluted EPS assumes that all ordinary securities are converted.
• D)Diluted EPS assumes that all ordinary and dilutive securities are converted.

---

Definitions:

Shareholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the net worth of the company to its shareholders.

Stock Split

An action by a company to divide its existing shares into multiple new shares to boost the stock's liquidity, although the overall value of the company remains unchanged.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.

Comprehensive Income

It encompasses all changes in equity during a period, except those resulting from investments by and distributions to owners.