When a Company Has a Net Loss from Continuing Operations

question 16

Multiple Choice

When a company has a net loss from continuing operations, it should include ________.

• A) all potentially dilutive securities in diluted EPS
• B) no potentially dilutive securities in diluted EPS
• C) only in the money warrants and options in diluted EPS
• D) only convertible issues in diluted EPS

---

Definitions:

Information Content Effect

The impact of news announcements on stock prices, reflecting changes in investor perceptions.

Efficient Markets Hypothesis

The theory that financial markets are "efficient" in reflecting information about the prices of securities, meaning that existing share prices always incorporate and reflect all relevant information.

Residual Dividend Approach

A policy for setting dividends based on a firm's residual or leftover earnings after financing planned capital expenditures.