Dilutive Warrants and Diluted EPS Calculation

Dilutive Warrants

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Question

Dilutive warrants are ________ included in the calculation of Diluted EPS.

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C

Diluted EPS reflects all securities that are potential shares and which decrease earnings per share. Also remember that all anti-dilutive securities are ignored. A dilutive security, by definition, is one that decreases EPS. Therefore, dilutive warrants are always included in the calculation of Diluted EPS.