In What Situation Would a Company Have to Calculate and Report

question 57

Multiple Choice

In what situation would a company have to calculate and report diluted EPS on the financial statements?

• A) a company that has both convertible preferred and common shares issued and outstanding
• B) a company whose common shares' fair market value has dropped 20% from the prior financial statement reporting period
• C) a company that has both nonconvertible preferred and common shares issued and outstanding
• D) a company that has only common shares issued and outstanding

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Definitions:

Slippery Slope Fallacy

A logical fallacy in which a relatively small first step leads to a chain of related events culminating in some significant effect, much like sliding down a slippery slope.

Gambler's Fallacy

A logical fallacy in which one assumes that future probabilities are altered by past events, often seen in gambling when assuming a certain outcome is "due".

Sunk Cost Fallacy

The misconception of valuing a project or investment based on the amount of resources already invested, rather than the prospective future returns.

Argumentum Ad Hominem

A logical fallacy that occurs when an argument is rebutted by attacking the character, motive, or other attribute of the person making the argument, rather than addressing the substance of the argument itself.