A subsidiary has dilutive securities outstanding that include convertible bonds payable. The bonds are convertible into the parent’s common stock. When calculating consolidated diluted earnings per share, the convertible bonds will affect
A. the numerator of consolidated diluted EPS only.
B. the denominator of consolidated diluted EPS only.
C. the numerator and denominator of consolidated diluted EPS.
D. None of the above will be affected.
Answer:C
A subsidiary has dilutive securities outstanding that include convertible bonds payable. The bonds are convertible into the parent’s common stock. When calculating consolidated diluted earnings per share, the convertible bonds will affect
A. the numerator of consolidated diluted EPS only. B. the denominator of consolidated diluted EPS only. C. the numerator and denominator of consolidated diluted EPS. D. None of the above will be affected.