A convertible security is used in the computation of

Question

Quizplus · Accepted Answer

Convertible securities, such as convertible bonds or convertible preferred stock, can be converted into common stock at a future date. Because the conversion of these securities into common stock could potentially increase the number of outstanding shares, they are included in the calculation of diluted earnings per share. Diluted earnings per share reflects the potential impact of all dilutive securities on a company's earnings per share calculation. Therefore, choice A is the best answer.

A Convertible Security Is Used in the Computation of