Which Statement Is Correct About the "Share Effect" on EPS

question 6

Multiple Choice

Which statement is correct about the "share effect" on EPS?

• A)This is the incremental before-tax income available to ordinary shareholders.
• B)This is the incremental after-tax income available to ordinary shareholders.
• C)This is the incremental number of ordinary shares outstanding before conversion.
• D)This is the incremental number of ordinary shares outstanding after conversion.

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Definitions:

Drive Reduction

A theory in psychology that posits that actions are motivated by the desire to reduce internal drives, such as hunger, that arise from biological needs.

Work Assignment

A task or set of tasks given to an individual or group as part of their job or studies.

Incentive

Something that motivates or encourages an individual to take action or behave in a certain way.

Homeostasis

The process by which living organisms regulate their internal environment to maintain a stable, constant condition for survival.