Question

Antidilutive securities __________.

a. include stock options and warrants whose exercise price is less than the average market price of common stock
b. are those whose inclusion in earnings per share computations would cause basic earnings per share to exceed diluted earnings per share
c. should be ignored in all earnings per share calculations should be included in the computation of diluted earnings per share but not basic earnings per share
d. should be ignored in all earnings per share calculations.

Answer 1

The answer is D.

Step-by-step explanation:

The financial instruments that are not in the form of equity or common stock, but when converted into equity or common stock will increase earnings per share are known as Antidilutive securities. Examples are convertible preferred stock, convertible debt instruments, warrants etc.

Antidilutive securities are not included in the calculation of earnings per share.