Q17. Protocol, Inc.’s net income for 2005 was $4,800,000. Protocol had 800,000 shares of common stock outstanding for the entire year. The tax rate was 40 percent. The average share price in 2005 was $37.00. Protocol had 5,000 8 percent $1,000 par value convertible bonds that were issued in 2004. Each bond is convertible into 25 shares of common stock. Protocol, Inc.’s basic and diluted earnings per share for 2005 were closest to: Basic EPS Diluted EPS
A) $5.45 $5.19 B) $6.00 $5.45 C) $6.00 $4.92
Q18. Which of the following statements regarding basic and diluted earnings per share (EPS) is most accurate? A) Neither basic nor diluted EPS considers antidilutive securities in its computation. B) To calculate diluted EPS, use net income less preferred dividends in the numerator. C) If diluted EPS is less than basic EPS then the convertible securities are said to be antidilutive.
Q19. Which of the following statements regarding basic and diluted EPS is least accurate? A) A simple capital structure contains no potentially dilutive securities. B) Antidilutive securities decrease EPS if they are exercised or converted. C) Dilutive securities decrease EPS if they are exercised or converted to common stock.
Q20. Orange Company’s net income for 2004 was $7,600,000 with 2,000,000 shares outstanding. The average share price in 2004 was $55. Orange had 10,000 shares of eight percent $1,000 par value convertible preferred stock outstanding since 2003. Each preferred share was convertible into 20 shares of common stock. Orange Company’s diluted earnings per share (Diluted EPS) for 2004 is closest to: A) $3.80. B) $3.45. C) $3.40.
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发表于 2009-1-17 09:45
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