If All of the Dilutive Securities Were Converted into Ordinary

question 48

Multiple Choice

If all of the dilutive securities were converted into ordinary shares, the diluted earnings per share ratio:

• A) may include an adjustment to increase the weighted average number of ordinary shares that would be outstanding
• B) must include an adjustment to decrease the weighted average number of ordinary shares that would be outstanding
• C) must include an adjustment to increase the number of ordinary shares that would be outstanding
• D) must include an adjustment to increase the weighted average number of ordinary shares that would be outstanding

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Definitions:

Interest Rate Risk

The potential for investment losses that result from a change in interest rates, affecting the value of fixed-income securities inversely to the direction of the rate change.

Default Risk

The risk that a borrower will not make the required payments on their debt obligations.

Maturity Risk

The risk associated with the changing value of securities due to the time remaining until their maturity date.

Yield to Maturity

The total return anticipated on a bond if it is held until the maturity date, factoring in the current price, par value, coupon yield, and time to maturity.