Options and warrants treasury stock method

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What is your email? Upgrade to remove ads. With respect to the computation of earnings per share, which of the following would be most indicative of a simple capital structure?

Common stock, preferred stock, and convertible securities outstanding in lots of even thousands b. Earnings derived from one primary line of business c.

Ownership interest consisting solely of common stock d. In computing earnings per share for a simple capital structure, if the preferred stock is cumulative, the amount that should be deducted as an adjustment to the numerator earnings is the a.

Treasury Stock Method - Complete Beginner's Guide! WallStreetMojo

In computations of weighted average of shares outstanding, when a stock dividend or stock split occurs, the additional shares are a. What effect will the acquisition of treasury stock have on stockholders' equity and earnings per share, respectively? Decrease and no effect b. Increase and no effect c. Decrease and increase d.

Due to the importance of earnings per share information, it is required to be reported by all Public Companies Nonpublic Companies a. 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.

When computing diluted earnings per share, convertible bonds are a. Dilutive convertible securities must be used in the computation of a.

In computing earnings per share, the equivalent number of shares of convertible preferred stock are added as an adjustment to the denominator number of shares outstanding. If the preferred stock is cumulative, which amount should then be added as an adjustment to the numerator net earnings?

Annual preferred dividend b. Annual preferred dividend times one minus the income tax rate c.

Treasury stock method — AccountingTools

Annual preferred dividend times the income tax rate d. Annual preferred dividend divided by the income tax rate. In the diluted earnings per share computation, the treasury stock method is used for options and warrants to reflect assumed reacquisition of common stock at the average market price during the period.

If the exercise price of the options or warrants exceeds the average market price, the computation would a.

Treasury Stock Method

In applying the treasury stock method to determine the dilutive effect of stock options and warrants, the proceeds assumed to be received upon exercise of the options and warrants a. When applying the treasury stock method for diluted earnings per share, the market price of the common stock used for the repurchase is the a.

Assume there are two dilutive convertible securities. The one that should be used first to recalculate earnings per share is the security with the a.