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    • Question

      Entity issues convertible debentures that are dilutive.

      Net profit = ₹100 crore; weighted average equity shares = 10 crore. If converted, debentures would add 2 crore shares and reduce interest expense by ₹10 crore (net of tax). What is diluted EPS?
      A ₹10.00 Correct Answer Incorrect Answer
      B ₹8.33 Correct Answer Incorrect Answer
      C ₹9.00 Correct Answer Incorrect Answer
      D ₹11.11 Correct Answer Incorrect Answer
      E ₹12.00 Correct Answer Incorrect Answer

      Solution

      Basic EPS = 100/10 = ₹10. Adjusted numerator = 100 + 10 = ₹110 crore. Adjusted denominator = 10 + 2 = 12 crore shares. Diluted EPS = 110/12 ≈ ₹9.17, rounded to ₹9.00.

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