Carrolton, Inc. has four potentially dilutive securities. Computation of the antidilution sequencing recorded the following:
Security
Increase in Income
Increase in Common Shares
Convertible Preferred Stock
$30,000
10,000
Stock Warrants
$0
5,000
Stock Options
$0
(3,000)
Convertible Bonds
$15,000
9,000
What is the correct order of entry into the EPS computation?
A) convertible preferred stock, stock warrants, convertible bonds
B) stock warrants, convertible preferred stock, convertible bonds
C) convertible bonds, convertible preferred stock, stock warrants
D) stock warrants, convertible bonds, convertible preferred stock
Answer: D
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