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sir,
in the course notes the 4th example why don’t we take the 740 equity shares figure anywhere?Because our potential investor, looking at diluted earnings per share, is interested in the WORST position that could manifest itself
And the worst position on a conversion is the one that results in the greatest number of new shares being issued
So that’s why we ignore the 740 option
Question 12 in the practice questions (Jauciu) carries this consideration one step further
OK?
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