In the diluted earnings per share computation, the treasury stock method is used for options and warrants to reflect assumed reacquisition of common stock at the average market price during the period. If the exercise price of the options or warrants exceeds the average market price, the computation would reflect the excess of the number of shares assumed issued over the number of shares assumed reacquired as the potential dilution of earnings per share. fairly present diluted earnings per share on a prospective basis. be antidilutive. fairly present the maximum potential dilution of diluted earnings per share on a prospective basis