Which Statement Is Correct

question 73

Multiple Choice

Which statement is correct?

• A)The numerator for diluted EPS is the same as the numerator for basic EPS.
• B)Potential ordinary shares are derivative instruments that entitle the holder to commodities.
• C)Potential ordinary shares are financial instruments that entitle the holder to ordinary shares.
• D)The numerator for diluted EPS is always greater than the numerator for basic EPS.

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Definitions:

Profit Margin

A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the efficiency of a company in managing its expenses and profits.

Required Accounting Return

The minimum return that a company needs to achieve on its investments based on accounting principles, to satisfy stakeholders or internal benchmarks.

Depreciated Straight-line

A method of calculating depreciation by equally spreading the cost of an asset over its useful life.

Book Value

The net asset value of a company, calculated by total assets minus intangible assets (patents, goodwill) and liabilities.