Which Statement Is Correct About the "If-Converted" Method for EPS

question 35

Multiple Choice

Which statement is correct about the "if-converted" method for EPS?

• A)This method assumes the interest is paid on the convertible security until it was converted into ordinary shares.
• B)This method assumes the interest is paid on the convertible security for one-half of the year.
• C)This method assumes the interest is paid on the convertible security for the period after its issue date.
• D)This method assumes the no interest is paid on the convertible security for the entire year.

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Definitions:

Social Exchange Theory

Proposes that people seek through their interactions to maximize their rewards and minimize their costs.

Maximize Rewards

A principle often found in social exchange theory, suggesting individuals seek to enter relationships that provide the greatest benefits with the least costs.

Minimize Costs

Refers to the process of reducing expenses or outlays in order to achieve financial efficiency or budgetary goals.

Population

Any well-defined group of people (or things) that researchers want to know something about.