The Potential Dilutive Effect of the Exercise of Share Options

question 111

Multiple Choice

The potential dilutive effect of the exercise of share options or warrants will affect which of the following when calculating diluted earnings per share?

• A) the earnings per share numerator
• B) the earnings per share denominator
• C) both the numerator and the denominator
• D) neither the numerator nor the denominator

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Definitions:

Balance Of Payments

A comprehensive record of a country's financial transactions with the rest of the world, including trade, investment, and monetary movements.

Treasury Bonds

Long-term government debt securities with a maturity of more than ten years, offering periodic interest payments to the holder.

Stock Dividends

Financial shares of a company's profit distributed to its shareholders typically issued in proportion to the number of shares held.

Current Account

A component of a country's balance of payments that measures the trade of goods and services, investment income, and direct transfers with foreign entities.