Waldo Washes Windows with Worldwide Window Washers

question 54

Multiple Choice

Waldo washes windows with Worldwide Window Washers.Waldo has just begun the second year of a 3-year contract that pays him $30,000 per year.Even though Waldo has performed his job perfectly,he was suddenly told that his contract was being terminated.Waldo was offered a couple of other jobs shortly after this contract was terminated.The first was as a custodian in a city 200 miles away paying $24,000 a year.The second was as a cook in a local fast food restaurant paying $22,000 a year.Waldo took neither job.In connection with his duty to mitigate,which of the following is true?

• A) Waldo would not be obligated to accept the custodian job.
• B) Waldo would not be obligated to accept the cook job.
• C) Waldo would be obligated to accept neither job.
• D) Waldo would be obligated to accept one of the jobs,but the choice of which one was up to Waldo.
• E) Waldo is not obligated to accept any job of any kind for the duration of the contract that was breached.

---

Definitions:

Dilutive

Referring to a financial action or arrangement, such as the issuance of new shares, that decreases an existing shareholder's percentage of ownership.

Antidilutive

Refers to financial transactions or securities that, if exercised or converted into common stock, would increase earnings per share.

Treasury Stock Method

An accounting method used to calculate the number of shares outstanding when considering stock options and warrants, assuming these are exercised and the treasury stock is sold.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the issuing company's equity at certain times during its life, usually at the discretion of the bondholder.