In determining earnings per share,interest expense,net of applicable income taxes,on convertible debt which is dilutive should be
A) ignored for diluted earnings per share.
B) added back to net income for diluted earnings per share.
C) deducted from net income for diluted earnings per share.
D) none of these.

Question

Quizplus · Accepted Answer

Interest expense, net of applicable income taxes, on convertible debt is added back to net income for diluted earnings per share because the debt can be converted to equity, potentially increasing the number of outstanding shares and diluting earnings per share.

In Determining Earnings Per Share,interest Expense,net of Applicable Income Taxes,on