Under Which of the Following Situations Would the Potential Ordinary

question 25

Multiple Choice

Under which of the following situations would the potential ordinary shares be included in the calculation of diluted earnings per share?

• A) Conversion of the potential ordinary shares would increase the loss from continuing ordinary operations per share.
• B) Conversion of the potential ordinary shares would increase earnings per share.
• C) Earnings per incremental share are greater than basic earnings per share.
• D) Out-of-the money options.
• E) None of the given answers.

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Definitions:

Labor Unions

Organizations that represent workers in negotiating with employers over wages, working conditions, and rights.

Human Resources

The division of a business that deals with recruiting, hiring, training, and managing employees, focusing on policies and systems to maximize workforce efficiency.

Line Managers

Managers who are directly responsible for overseeing the performance of employees and the day-to-day operations of the business.

Labor Unions

Organizations that represent the collective interests of workers in negotiations with employers.