Contingently issuable shares may be included in:
A)Basic EPS.
B)Diluted EPS.
C)Both A and B.
D)None of these answer choices is correct.

Question

Quizplus · Accepted Answer

Contingently issuable shares are not included in basic EPS, as they are not yet considered to be outstanding shares. However, they may be included in diluted EPS if it is probable that the contingency will be met and the shares will be issued. This is because diluted EPS assumes that all potential dilutive securities, including contingently issuable shares, are fully converted or exercised.

Contingently Issuable Shares May Be Included In