To Calculate Diluted EPS,the Accountant Does All of the Following

question 9

Multiple Choice

To calculate diluted EPS,the accountant does all of the following except:

• A) adds back to net income any compensation expense recognized on the employee stock options
• B) adds back any interest expense (net of taxes) on convertible bonds
• C) adds back any dividends on convertible preferred stock the firm subtracted in computing net income to common shareholders.
• D) enters only the net incremental shares issued (shares issued under options minus assumed shares repurchased) in the computation of diluted EPS.

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