When a Company Has Negative Net Income and Potentially Dilutive

question 30

Multiple Choice

When a company has negative net income and potentially dilutive securities,the calculation of EPS results in:

• A) Diluted EPS i.e. all potentially dilutive securities are included in the calculation (whether dilutive or anti-dilutive).
• B) No EPS being reported.
• C) Diluted EPS being reported and it will be more than basic EPS.
• D) None of these choices are correct.

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Definitions:

Market System

An economic system where decisions about production, investment, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.

Command-and-control

A type of regulation where the government sets specific limits for pollution emissions and may also mandate specific pollution control technologies.

Incentive-based Regulations

Regulatory methods designed to encourage businesses to improve their environmental performance through rewards or penalties.

Political Suicide

Actions or decisions by a politician that are likely to seriously harm their own career or reputation.