Convertible securities in a capital structure may require the adjustment of both the numerator and denominator of the basic EPS formula.

Name: Convertible securities in a capital structure may require the adjustment of both the numerator and denominator of the basic EPS formula.
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Question

Quizplus · Accepted Answer

Convertible securities can affect both the numerator (net income) and the denominator (weighted average shares) of the basic EPS formula due to potential interest savings and share conversion.

Convertible Securities in a Capital Structure May Require the Adjustment