Pennock Inc. has convertible preferred stock outstanding. To compute the diluted EPS, it must adjust ________.

Name: Pennock Inc. has convertible preferred stock outstanding. To compute the diluted EPS, it must adjust ________.
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Question

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To compute diluted EPS with convertible preferred stock, both the numerator (net income) and the denominator (weighted average shares) must be adjusted to reflect the conversion of preferred stock into common stock.