Yoder, Incorporated, Has 3,600,000 Shares of Common Stock Outstanding OnDecember

question 127

Multiple Choice

Yoder, Incorporated, has 3,600,000 shares of common stock outstanding onDecember 31, 2014. An additional 800,000 shares of common stock were issued onApril 1, 2015, and 400,000 more on July 1, 2015. On October 1, 2015, Yoder issued 20,000, $1,000 face value, 8% convertible bonds. Each bond is convertible into 20 shares of common stock. No bonds were converted into common stock in 2015. What is the number of shares to be used in computing basic earnings per share and diluted earnings per share, respectively?

• A) 4,400,000 and 4,400,000
• B) 4,400,000 and 4,500,000
• C) 4,400,000 and 4,800,000
• D) 4,800,000 and 5,600,000

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Definitions:

Coefficient Alpha

A reliability coefficient that measures the internal consistency of a test or scale; it is commonly used in psychometrics.

Reliability

The reliability of an evaluation tool in generating steady and unchanging outcomes over various periods.

Spearman-Brown Formula

A mathematical formula that can be used with split-half or odd-even reliability estimates to increase the accuracy, which is impaired because of the shortening (splitting in half) of the test.

Reliability Estimate

A measure of the consistency of a psychological test or assessment tool across time, items, and raters, indicating its stability and dependability.