Diluted EPS

Hello Sir, Why in the calculation of diluted EPS they ignored the rights issue of shares of 1 to 5 ,that also will add to the no of shares and consequently dilute the EPS? and what they mean by the granting during the year of directors' share options exercisable in three years' time, do they mean that these options applicable to directors only. Thanks, ------------------------------------------------------------------------------------------------------------------------- Aqua Co has correctly calculated its basic earnings per share (EPS) for the current year. Which of the following items need to be additionally considered when calculating the diluted EPS of Aqua Co for the year? (i) A 1 for 5 rights issue of equity shares during the year at $1.20 when the market price of the equity shares was $2.00 (ii) The issue during the year of a convertible (to equity shares) loan note (iii) The granting during the year of directors' share options exercisable in three years' time (iv) Equity shares issued during the year as the purchase consideration for the acquisition of a new subsidiary company A All four B (i) and (ii) only C (ii) and (iii) only D (iii) and (iv) only The answer C The issue during the year of a convertible (to equity shares) loan note The granting during the year of directors' share options exercisable in three years' time The convertible loan note and the share options should be taken into account when calculating diluted EPS.