In Computing Earnings Per Share, the Equivalent Number of Shares

question 145

Multiple Choice

In computing earnings per share, the equivalent number of shares of convertible preferred stock are added as an adjustment to the denominator (number of shares outstanding) . If the preferred stock is cumulative, which amount should then be added as an adjustment to the numerator (net earnings) ?

• A) Annual preferred dividend
• B) Annual preferred dividend times (one minus the income tax rate)
• C) Annual preferred dividend times the income tax rate
• D) Annual preferred dividend divided by the income tax rate

Discern between different types of costs and their relevance to capital budgeting.

Understand and apply various methods to calculate project operating cash flow (OCF).

Explain key concepts and calculate related values in capital budgeting, including sunk cost, opportunity cost, depreciation tax shield, and the stand-alone principle.

Understand the concept of Equivalent Annual Cost (EAC) and its utility in financial decision-making.

---

Definitions:

Therapeutic Abortion

The medical termination of a pregnancy for reasons related to the health and well-being of the mother, underlining its role in healthcare and ethics.

Partial Birth Abortion

A controversial term referring to a late-term abortion procedure where the fetus is partially delivered before being aborted.

Voluntary Abortion

The intentional termination of a pregnancy through medical or surgical means by choice of the pregnant individual.

Partial-Birth Abortions

A non-medical term often used to describe a procedure known medically as intact dilation and extraction (D&X), which is a late-term abortion method.