Asked by Tshepo Faith on Jun 25, 2024
Verified
Dual presentation of the basic and diluted earnings per share amounts is
A) required for corporations with simple capital structures
B) optional for corporations with simple capital structures
C) optional for corporations of any structure
D) required for corporations with complex capital structures
Diluted Earnings Per Share
A performance metric that shows the quality of earnings per share if all convertible securities were exercised.
Complex Capital Structures
Refers to corporate financial structures that feature a mix of simple and intricate financial instruments, such as multiple classes of stock or convertible bonds.
- Demonstrate knowledge of the requirements and methods for presenting earnings per share (EPS) in financial reports for simple and complex capital structures.
Verified Answer
TS
Tushar Saini DahariaJun 30, 2024
Final Answer :
D
Explanation :
Dual presentation of the basic and diluted earnings per share (EPS) is required for corporations with complex capital structures. This is because complex capital structures include securities that could potentially dilute basic EPS, such as options, warrants, convertible debt, or convertible preferred stock.
Learning Objectives
- Demonstrate knowledge of the requirements and methods for presenting earnings per share (EPS) in financial reports for simple and complex capital structures.