[cpaswag]

The answer was delete text (this is in testlet 5 of aicpa sample exam for FAR problem but I don’t get why, is this because excercise of warrants has no effect on EPS in general?

If someone can see sample example and look at second to last problem for the DRS it would mean a lot

https://apps.aicpa.org/17Q2SampleTest/17Q2start.html?cm_mmc=AICPA-_-CPAExam-_-exam_tutorial_parallel-_-CBT-e+sample+tests+and+tutorial

[Recked]

It's been awhile since I took FAR but I'll take a stab at this.
I believe the DEPS already assumes that the warrants have been exercised.
The Basic EPS is .13, and the DEPS is .11, (assuming the warrants had already been exercised), so none of the provided answers are correct.

[cpaswag]

@recked so if basic is greater than diluted it means warrants excercised?

[Recked]

you are missing the point of diluted completely.
basic is always greater than diluted (as far as I know… it would not be DILUTED if it wasn't less than)
Diluted always assumes the actions that COULD dilute the EPS, did happen.

[Author]

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