Reference no: EM132973128

Problem 1: Antidilutive securities

a. should be included in the calculation of diluted earnings per share but not basic earnings per share.

b. are those whose inclusion in earnings per share calculations would cause basic earnings per share to exceed diluted earnings per share.

c. include call options and warrants whose exercise price is less than the average market price of common shares.

d. should be ignored in all earnings per share calculations.

e. should be none of the above

Problem 2:  Assume a corporation has two potentially dilutive convertible securities outstanding. The one that should be used first to calculate diluted earnings per share is the security with the

Select one:

a. greater earnings adjustment.

b. greater earnings per share adjustment.

c. smaller earnings adjustment.

d. smaller earnings per share adjustment.

e. None of the above.