If I have the situation as follows:
1st Jan: 1mil common share outstanding
1st Mar: Issue 0.1 mil convertible bond: conversion rate 1:5
1st June: Stock split 2:1
Assume that convertible bonds are dilutive securities the denominator will be calculated as follow:
(1mil * 12/12 + 0.1mil * 5 *10/12) * 2 = 2.83 mil shares
Is that correct? I mean I have to consider the stock split effect for the convertible bonds if they are converted?