Concerning Earnings Per Share for a Complex Capital Structure, Which

question 8

Multiple Choice

Concerning earnings per share for a complex capital structure, which of the following statements is incorrect?

• A)"Basic earnings per share" is never reported at less than "diluted earnings per share."
• B)If the only potentially dilutive security outstanding is an employee stock option plan, then primary and diluted EPS must be equal.
• C)Both basic and diluted earnings per share must be presented on the face of the financial statements.
• D)A "convertible security" is a security which is not, in form, a common share but which contains provisions to enable its holder to become a common shareholder.
• E)Basic earnings per share must be based on the weighted average number of common shares outstanding.

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