1. Which of the following is not true?

1. Basic eps and diluted eps are equal in a loss situation.
2. Bonds are potentially dilutive if the effect of the bonds is less than basic eps.
3. Stock splits are not treated retroactively from the time of the split but stock dividends are treated retroactively to the beginning of the current year.
4. The dividends on cumulative preferred stock do not include all prior dividends in arrears for computing this periods basic eps