MCQ

JII held the five securities on January 1, 2019. These remained unchanged throughout the year. There were no equity related transactions during the year. Particulars about the basic EPS plus the incremental per share effect required for the calculation of diluted EPS is given for each of the five securities are listed below alphabetically as follows:

Shares Basic EPS 1,000,000	Adjusted Income 4,340,000
Security Change in shares	Change in income
Call options 60,000	$0
Convertible bonds 105,000	$420,000
Convertible preferred shares 120,000	$160,000
Put options (8000)	$0
Warrants 200,000	$0

Determine the diluted EPS and identify if any of the securities, are excluded from the computation

a. The diluted EPS is $3.77 . The three options are to be excluded as IFRS requires all derivative securities to be excluded from the calculation of diluted EPS.

b. The diluted EPS is $4.00 . The Put Options are excluded as they are anti-dilutive.

c. The diluted EPS is $3.24 being the same as the Basic EPS. All of the five securities are to be excluded since they have not actually been converted and are only assumed to have been converted. IFRS does not allow reporting based upon mere assumptions.

d. The diluted EPS is $3.26 . The Put Options and the Convertible Bonds are excluded as they are anti-dilutive.

e. None of the above are correct.