ABC Ltd's Basic Earnings Per Share Is $1 Average Share Price for ABC Ltd During the Year Is

ABC Ltd's basic earnings per share is $1.25 for the year ended 2012.The company has the following outstanding potential ordinary shares at the start of the year with the following information: $$\begin{array} { | l | r | r | } \hline { \text { Potential ordinary shares (POS) } } & \text { Number of POS } & \text { Incremental EPS } \\\hline \text { Preference shares } & 50000 & \$ 0.17 \\\hline \text { Convertible notes } & 50000 & \$ 0.20 \\\hline \text { Executive options(exercise price } - \$ 2.20 \text {; expiry date 30/06/16) } & 100000 & \text { NA } \\\hline \text { Employee options (exercise price } - \$ 1.70 \text {; expiry date 30/06/14) } & 100000 & \text { NA } \\\hline\end{array}$$ Average share price for ABC Ltd during the year is $1.80.
Which of the above potential ordinary shares is the most dilutive and least dilutive POS in accordance with AASB 133 Earnings per Share,respectively?

A) convertible notes, employee options
B) executive options, convertible notes
C) employee options, convertible notes
D) preference shares, executive options

Correct Answer:

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