When there are multiple dilutive securities in a firm, the antidilution test for the sequence should be from ________.
The correct answer is Most Dilutive to Least Dilutive
Dilutive securities refers to the securities that can be converted into the common stock which can increase the number of shares outstanding. These securities can reduce the earning per share of the stock as the number of shares gets larger and earning is distributed among them and the antidilution test protects the investors from the dilution of the equity and when there are multiple dilutive securities are available in a firm, the sequence should be followed from Most Dilutive to Least Dilutive.
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