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(B) Proposed financing
Most convertible bonds are dilutive instruments. This is because the entity has a commitment to issue ordinary shares in the future. The maximum number of shares that Verge may issue to redeem the convertible bonds should be included in the diluted earnings per share calculation. Moreover, the earnings figure used in the calculation should be increased by the current year interest on the bond because this will not be charged after redemption (Page 264)Q, Coul you please elaborate this paragraph? Espeicially I have no idea the meaning of the last sentence. Thank you.
I think it’s saying that when you calculate diluted eps:
1. Increase shares by number of shares that would be issued on conversion
2. Increase earnings by the interest that would be saved on conversionIn other words, they are explaining logic behind diluted eps (detail of this F7/FR lectures)
hello sir
i just wanted to ask that whether there is an oppertunity for sbr students to attemt mock on opentution and whether they will receive their mock results
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