Which Statement Is Correct

question 87

Multiple Choice

Which statement is correct?

• A)A simple capital structure includes potentially dilutive securities.
• B)A simple capital structure excludes potentially dilutive securities.
• C)EPS applies only to a company with a simple capital structure.
• D)A company with a simple capital structure does not need to calculate EPS.

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Definitions:

Goodwill

Represents the intangible asset that arises when a company acquires another for a price higher than the fair value of its net identifiable assets.

Equity Method

An accounting technique used to record investments in other companies, recognizing income and changes in investment value in proportion to the ownership percentage.

Appraised Value

An estimation of the value of property, typically real estate, as determined by a professional appraiser based on market conditions and property characteristics.