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Reading 32: Understanding the Income Statement - LOS h, (Pa

16.A firm with a capital structure consisting of only common stock and non-convertible bonds is said to have a:

A)   straight capital structure.

B)   non-diluted capital structure.

C)   conventional capital structure.

D)   simple capital structure.

17.Which type of a capital structure contains no dilutive securities?

A)   Complex.

B)   Functional.

C)   Basic.

D)   Simple.

18.Juniper Corp’s stock transactions during the year 2004 were as follows:

§       January 1            540,000 shares issued and outstanding

§       March 1              50 percent stock dividend

§       July 1                 180,000 treasury shares reacquired

§       October 1            60,000 treasury shares reissued

When computing for earnings per share (EPS) computation purposes, what was Juniper’s weighted average number of shares outstanding during 2004?

A)   930,000.

B)   870,000.

C)   766,667.

D)   735,000.

19.A complex capital structure, for purposes of determining disclosure of diluted Earnings Per Share, is distinguished from a simple capital structure by the:

A)   company having issued warrants, convertible securities, or options.

B)   company's use of debt to finance its operations.

C)   company's use of callable securities.

D)   company having preferred stock outstanding.

20.Which of the following securities would NOT be found in a simple capital structure?

A)   6%, $5000 par value putable bond.

B)   3%, $100 par value convertible preferred.

C)   8%, $1000 par value callable mortgage bond.

D)   7%, $100 par value non convertible preferred.

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