JII held the five securities on January 1, 2019. These

JII held the five securities on January 1, 2019. These remained unchanged throughout the year. There were no equity related transactions during the year. Particulars about the basic EPS plus the incremental per share effect required for the calculation of diluted EPS is given for each of the five securities are listed below alphabetically as follows:

Shares

Basic EPS 1,000,000

Adjusted Income

4,340,000

Security

Change in shares

Change in income

Call options

60,000

$0

Convertible bonds

105,000

$420,000

Convertible preferred shares

120,000

$160,000

Put options

(8000)

$0

Warrants

200,000

$0

List all securities in the order of potential dilutivenessand assign the appropriate rank for each security.

a. Call Options [R1], Warrants [R1], Put Options [R1], Convertible Preferred Shares [R2], Convertible Bonds [R3] are all potentially dilutable securities; and none of the securities should be excluded.

b. Call Options, Warrants and Put Options should be excluded as they do not contribute to income; and Convertible Preferred Shares [R1] and Convertible Bonds [R2] are both potentially dilutable securities.

c. Call Options [R1], Put Options [R1], Warrants [R1], Convertible Bonds [R2], are all potentially dilutable securities; and Convertible Preferred Shares, being an equity component becomes anti-dilutive and is to be excluded.

d. Call Options [R1], Put Options [R1], Warrants [R1] and Convertible Preferred Shares [R2] are all potentially dilutable securities; and Convertible Bonds [R2] being a long-term debt is reported annually at fair market value becomes anti-dilutive and so is to be excluded.

e. Call Options [R1], Warrants [R1], Convertible Preferred Shares [R2], Convertible Bonds [R3] are all potentially dilutable securities; and Put Options, being anti-dilutive are to be excluded.

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