I thought I understood earnings per share," lamented Brie Dawson, "but you're telling me we need to pretend our convertible bonds have been converted! Or maybe not?" Dawson, your boss, is the new manager of the Fabricating division of BVT Corporation. Dawson's background is engineering and he has only a basic understanding of earnings per share. Knowing you are an accounting graduate, Dawson asks you to explain the calculation of the company's EPS. Dawson's reaction is to your explanation that the company's convertible bonds might be included in this year's calculation. "Put it in a memo!" Dawson grumbled and left your office. Required: Write a memo to Dawson. Explain the effect on earnings per share of each of the following: 1. Convertible securities. 2. Antidilutive securities