1. The Johnson Company is computing diluted earnings per share for the current year. The company has convertible bonds outstanding that have been judged as being anti-dilutive. What is the significance of anti-dilution ?

		The bonds must be included in the computation of diluted earnings per share
		Inclusion of the bonds in the computation must be made using the most conservative method
		Because of the high rate of interest on these bonds, the impact must be separately disclosed within the computation
		Inclusion of the bonds in the computation will cause the reported figure to increase so that the potential conversion of the bonds should be excluded