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:

Income Inequality

The unequal distribution of income within a population, leading to disparities in wealth and living standards.

Wealthy Country

A nation characterized by a high standard of living and a strong economic system, usually measured by gross domestic product (GDP) per capita.

Social Mobility

The movement of individuals, families, or groups through a system of social hierarchy or stratification, which can be either upward or downward in nature.

Meritocratic Mobility

The movement of individuals within or between social strata in a society based on their abilities, talents, and merits rather than on class privilege or wealthy heritage.