What Are the Two Assumptions of the "If-Converted Method" Used

question 76

Essay

What are the two assumptions of the "if-converted method" used when calculation incremental EPS?

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Definitions:

Central Limit Theorem

A statistical theory that states the distribution of sample means approaches a normal distribution as the sample size becomes larger, regardless of the population's distribution.

Sampling Distribution

The configuration of probability for a given statistic, determined by a random sample.

Sample Mean

The average value calculated from a set of samples or observations drawn from a larger population.

Population Mean

The population mean is the average value of a population attribute, computed by summing all the values in the population and dividing by the total number of values.