medium · Investment Banking
In the 'If-Converted' method for an in-the-money convertible bond, how are the interest expense and the share count adjusted for the EPS calculation?
- Subtract interest from Net Income; Add conversion shares to denominator
- Add back pre-tax interest; Denominator remains unchanged
- No adjustment to Net Income; Use TSM for shares
- Add back after-tax interest; Add conversion shares to denominator
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