Which of the Following Is True for a Firm with Positive

question 108

Multiple Choice

Which of the following is true for a firm with positive earnings?

• A) When bonds are converted into shares of stock, earnings per share increases.
• B) When warrants are exercised, earnings per share increases.
• C) The number of shares of stock outstanding will decrease with either convertible bonds or warrants.
• D) Exercise of warrants and conversion of bonds will always result in a decrease in the price of the stock.
• E) Fully diluted earnings per share with either warrants or convertible bonds will be lower than earnings per share based only on shares presently outstanding.

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Definitions:

Factor Comparison

A method used in job evaluation that involves comparing jobs to each other based on compensable factors to determine relative worth within an organization.

Forced Distribution Method

A performance evaluation approach where employees are ranked in groups and distributions, often aimed at identifying top performers, average performers, and underperformers.

Statistical/Policy Capturing Method

A research method that quantitatively models the decision-making policies of individuals by analyzing their responses to various stimuli or scenarios.

Ranking Method

A method used in human resources to evaluate job positions within an organization by ordering them in a hierarchy of importance or relevance to the company's objectives.