When a Company with a Complex Capital Structure Has a Loss

question 72

Multiple Choice

When a company with a complex capital structure has a loss from continuing operations and potentially dilutive securities,the calculation of earning per share (EPS) results in

• A) simple EPS (no potentially dilutive securities are included in the calculation).
• B) no EPS being reported.
• C) EPS being reported,using the same calculation of dilutive EPS as would be used if net income were positive.
• D) EPS being reported,using securities in the calculation of dilutive EPS that would be anti-dilutive if income were positive.

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Definitions:

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders, often reinvested into the business.

Ledger Accounts

Records within a ledger that summarize all the transactions related to a specific account, providing a complete record of financial transactions over the life of the account.

Net Income

The sum a company earns net of all expenses and taxes, deducted from its overall revenue.

Rent Revenues

Income earned by a company or individual from leasing property or other assets to tenants.