When a subsidiary has preferred stock that is convertible into subsidiary common stock, the parent’s equity in the subsidiary’s diluted earnings is calculated by the number of
A. subsidiary shares into which the subsidiary’s dilutive securities can be converted times the subsidiary’s basic EPS figure.
B. parent shares into which the subsidiary’s dilutive securities can be converted times the parent’s basic EPS figure.
C. subsidiary common shares held by the parent times the subsidiary’s diluted EPS figure.
D. parent shares into which the subsidiary’s dilutive securities can be converted times the subsidiary’s basic EPS figure.
Answer:C
When a subsidiary has preferred stock that is convertible into subsidiary common stock, the parent’s equity in the subsidiary’s diluted earnings is calculated by the number of
A. subsidiary shares into which the subsidiary’s dilutive securities can be converted times the subsidiary’s basic EPS figure. B. parent shares into which the subsidiary’s dilutive securities can be converted times the parent’s basic EPS figure. C. subsidiary common shares held by the parent times the subsidiary’s diluted EPS figure. D. parent shares into which the subsidiary’s dilutive securities can be converted times the subsidiary’s basic EPS figure.