A Convertible Bond's Net-Of-Tax Interest Expense Is Added Back to Net

question 45

True/False

A convertible bond's net-of-tax interest expense is added back to net income when determining diluted earnings per share only if the bond is known to be dilutive.

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Definitions:

Beneficiary

An individual or entity entitled to benefits or proceeds from a will, insurance policy, retirement account, or other contractual arrangement.

Terminate

To bring something to an end or conclusion, effectively stopping its continuation or existence.

Voidable

A term referring to a contract or transaction that is valid and enforceable but may be declared void by one party due to certain defects.

Minor

An individual under the age of legal adulthood, typically under 18, and thus is limited in their legal capacity to make certain types of decisions or enter into contracts.