Under the if-converted method, the impact of various convertible securities on the diluted earnings per share calculation are ranked from

Question

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Under the if-converted method, the impact of convertible securities is measured by assuming that they have been converted into common shares. The potential impact on diluted earnings per share is then ranked from the most dilutive (e.g. convertible preferred stock with a low conversion price or high interest rate) to the least dilutive (e.g. convertible bonds with a high conversion price). Therefore, the answer is B, the most dilutive impact to the least dilutive impact.

Under the If-Converted Method, the Impact of Various Convertible Securities