Which Statement Best Reflects the Issues Associated with the Computation

Which statement best reflects the issues associated with the computation of diluted earnings per share?

A) Diluted earnings per share represents the potential impact of all shares of common stock.
B) When presenting comparative financial statements, the impact of convertible bonds must be included for both years.
C) Common stock options are considered dilutive when the average market price is greater than the option price.
D) The impact on the denominator is always the determinate of whether or not to use diluted earnings per share.

Correct Answer:

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