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Basic Question 27 of 40
When calculating earnings per share (EPS) for firms with complex capital structures, convertible bonds are ordinarily considered to be ______.
B. antidilutive securities
C. embedded debt securities
A. potentially dilutive securities
B. antidilutive securities
C. embedded debt securities
User Contributed Comments 3
| User | Comment |
|---|---|
| kalps | If diluted EPS > Basic EPS then the convertible bond is antidilutive and should not be considered as common stock in computing the diluted EPS |
| Saxonomy | In English... if diluted EPS > basic EPS, then use basic EPS. |
| Seancfa1 | Thank-you Saxonomy^ :-) |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe how earnings per share is calculated and calculate and interpret a company's basic and diluted earnings per share for companies with simple and complex capital structures including those with antidilutive securities
CFA® 2025 Level I Curriculum, Volume 2, Module 2.