Q5. Hamilton correctly calculates diluted EPS at approximately: A) $1.19. B) $1.23. C) $1.50.
Q6. Empire Watch Company’s basic earnings per share (EPS) and diluted earnings per share (Diluted EPS) were both $2.00 in
2004, in 2005 basic EPS was $2.50 but Diluted EPS was $2.25. The fact that basic EPS and diluted EPS were the same in 2004 and different in 2005 could possibly be explained by any of the following EXCEPT: A) the average price per share of Empire Watch's common stock was higher in 2005. B) Empire Watch issued convertible bonds in 2005. C) Empire Watch purchased its own stock and held it as treasury stock in 2005.
Q7. All of the following are considered a potentially dilutive securities EXCEPT: A) stock options. B) preferred stock. C) warrants.
Q8. Examples of potentially dilutive securities include all of the following EXCEPT: A) non-convertible bonds. B) convertible preferred stock. C) options.
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