The diluted earnings per share calculation includesSelect one:O a. any convertible security that is antidilutiveO b. only potential ordinary shares that are dilutiveO c. all dilutive and antidilutive potential ordinary sharesO d. all dilutive and antidilutive convertible securities

Diluted earnings per share calculate a company's EPS if all the convertible securities are…

Answered: The diluted earnings per share…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter20: Hybrid Financing: Preferred Stock, Warrants, And Convertibles

Section: Chapter Questions

Problem 6Q

See similar textbooks

Similar questions

When computing diluted earnings per share (EPS), convertible bonds are:A. ignored.B. assumed converted whether they are dilutive or antidilutive.C. assumed converted only if they are antidilutive.D. assumed converted only if they are dilutive.
All of the following are key similarities between GAAP and IFRS with respect to accounting for dilutive securities and EPS except: a. the model for recognizing stock-based compensation. b. the calculation of basic and diluted EPS. c. the accounting for convertible debt. d. the accounting for modifications of share options, when the value increases.
Which statement is incorrect?A. Dilution of EPS is the decrease in EPS when convertible instruments are converted to ordinary sharesB. The purpose of diluted EPS is to provide a comparison figure for creditors.C. Dilutive convertible securities must be used in the computation of diluted EPS but not in basic EPS.D. Antidilutive securities should be ignored in all EPS calculations.E. none of the above Note: EPS is Earnings Per Share
Which of the following statements is true regarding diluted earnings per share? Select one: a. Contingently issuable shares are considered outstanding in the computation of diluted EPS when any conditions for issuance are currently being met. b. To incorporate convertible bonds into the calculation, the denominator of the EPS fraction is decreased by the additional common shares assumed. c. It is assumed that stock options are exercised at the beginning of the period (or at the time the options are issued, if later) and the cash proceeds received are used to buy back (as treasury stock) as many of those shares as can be acquired at the closing market price for the period. d. To incorporate convertible securities into the calculation, the numerator is decreased by the interest (after-tax) that would have been avoided in the event of conversion.
Which statement is incorrect? * Dilution of EPS is the decrease in EPS when convertible instruments are converted to ordinary shares The purpose of diluted EPS is to provide a comparison figure for creditors. Dilutive convertible securities must be used in the computation of diluted EPS but not in basic EPS. Antidilutive securities should be ignored in all EPS calculations. none of the above
Which statement is incorrect? * A. Dilution of EPS is the decrease in EPS when convertible instruments are converted to ordinary shares B. The purpose of diluted EPS is to provide a comparison figure for creditors. C. Dilutive convertible securities must be used in the computation of diluted EPS but not in basic EPS. D. Antidilutive securities should be ignored in all EPS calculations. E. none of the above
When dilutive convertible bonds are the only potential ordinary shares, the diluted earnings per share (EPS) will be __________if the bonds are actually converted compared to when they are not converted.A. lowerB. higherC. the sameD. incomparable
A convertible bond issue should be included in the diluted earnings per share computation as if the bonds had been converted into common stock, if the effect of its inclusion is Dilutive Antidilutive a. No No b. Yes No c. Yes Yes d. No Yes
7. If treasury shares are subsequently retired and the cost of the treasury shares exceeds the par value, the difference is charged Group of answer choices a. first, Share premium from the original issuance and then Retained Earnings. b. first to share premium from original issuance and then share premium from treasury shares of the same class. c. first to share premium from original issuance, and then share premium from treasury shares of the same class and then to retained earnings. d. first to share premium from treasury shares of the same class and then the balance to retained earnings.
The Share Premium arising from the conversion of bonds can be computed by deducting the par value of the issued shares from the sum of the following, except a.)Conversion Privilege Premium, only to the extent converted b.)Carrying amount of the convertible bonds c.)All of these are added to get the Share Premium d.)Cash received from the conversion
What are the computational guidelines for determiningwhether a convertible security is to be reported as part ofdiluted earnings per share?
If shares are issued for a non-cash asset, the share should be recorded at? a. Zero b. Fair market value c. Par or stated value d. Cost

SEE MORE QUESTIONS

Recommended textbooks for you

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

SEE MORE TEXTBOOKS

The diluted earnings per share calculation includes Select one: O a. any convertible security that is antidilutive O b. only potential ordinary shares that are dilutive O c. all dilutive and antidilutive potential ordinary shares O d. all dilutive and antidilutive convertible securities