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With respect to the computation of earninqs per share,which of the following would be most indicative...

With respect to the computation of earninqs per share,which of the following would be most indicative of a simple capital structure?

A.        Common stock, preferred stock and convertible debt outstanding

B.        Common stock, convertible preferred stock, and and debt outstanding.

C.        Common stock, preferred stock, and debt outstanding.

D.        Common stock, preferred stock, and stock options outstandin

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Answer #1

With respect to computation of earnings per share , the option which would be most indicative of a simple capital structure is :-

Answer :- ( C ) common stock , preferred stock and debt outstanding

Explanation :- with respect to computation of EPS , the simplest capital structure out of given options is having common stock , preferred stock and debt outstanding . It would be easy computing EPS in this capital structure .

The other options given are complex capital structure with respect to EPS computation . Option A has convertible debt outstanding which is complex , option B has convertible preferred stock and option D has stock options outstanding which is complex .

So, option C is the answer .

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