Question

what factors would affect the calculation of diluted eps if convertible bonds are assumed to have been converted into common stock of the issuing company? (select all that apply.) multiple select question. the numerator would reflect the pretax savings of interest. the denominator would reflect the number of bonds assumed converted. the denominator would reflect the additional common shares assumed issued. the numerator would reflect the after-tax savings of interest.

Answer 1

The factor that would affect the calculation of diluted eps if convertible bonds are assumed to have been converted into common stock of the issuing company is The denominator would reflect the additional common shares assumed issued.

Convertible bonds:

Convertible bonds refers the fixed-income corporate debt security that yields interest payments, but can be converted into a predetermined number of common stock or equity shares.

Given,

Here we need to find the factors would affect the calculation of diluted eps if convertible bonds are assumed to have been converted into common stock of the issuing company.

While we looking into the given question,

we have identify that here  we need to find the factors would affect the calculation of diluted EPS when the convertible bonds are assumed to have been converted into common stock of the issuing company.

Here the option  The denominator would reflect the additional common shares assumed issued is the correct one for this situation.

To know more about Convertible bonds here.

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