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Flagstaff Ltd Has the Following Potentially Diluting Securities Outstanding for the Year

Question 40

Multiple Choice

Flagstaff Ltd has the following potentially diluting securities outstanding for the year ended 30 June 2009: $200,000 6.5% Convertible Note (10,000 ordinary shares)
$200,000 6.5% Convertible Preference shares (10,000 ordinary shares)
10,000 employee options convertible to one ordinary share (Exercise price $2.50; average market price during the year was $2.70)
50,000 executive options convertible to one ordinary share (exercise price $4.50)
Basic EPS for the year ended 30 June 2009 is calculated at $1.20 per share.
Rank the above securities in the order of most dilutive to least dilutive potential ordinary shares that is in accordance with AASB 133


A) Executive options, employee options, convertible preference shares and convertible notes.
B) Executive options, employee options, convertible notes and convertible preference shares.
C) Employee options and convertible notes.
D) Employee options, convertible notes and convertible preference shares.
E) None of the given answers.

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