1.) A company has convertible bonds outstanding. In the company's computation of diluted EPS, the numerator should be

a.) increased by the interest paid on the bonds during the fiscal year.

b.) increased by the after-tax interest expense on the bonds for the fiscal year.

c.) decreased by the interest paid on the bonds during the fiscal year.

d.) decreased by the after-tax interest paid on the bonds during the fiscal year.

2.) A company has convertible bonds outstanding. In the company's computation of diluted EPS, the denominator should be increased by the

a.) number of bonds in the the debt issue.

b.) conversion ratio times the number of bonds outstanding net of taxes.

c.) conversion ratio times the number of bonds outstanding.

d.) number of bonds issued during the current year.