Question

A complex capital structure requires? a. a dual presentation of earnings per share b. consists of...

A complex capital structure requires?

a.

a dual presentation of earnings per share
b.

consists of common stock and convertible preferred stock or convertible bonds
c.

applies only when a company has nonconvertible preferred stock or nonconvertible bonds
d.

both a and b
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

d. Both a and b

A complex capital structure is one that different forms of securities and has different types of common stock classes. In short, a complex capital structure is the one that consists of anything other than or in addition to common stocks and bonds. Hence, if a company has convertible debt, convertible preferred stocks, etc then the structure is called a complex capital structure.

Such a complex capital structure required a dual presentation of EPS, where presentation is made for each separate class of common share. Such presentations are necessary to adequately inform the financial statement users about the implications and likelihood of any events and to provide worst-case scenarios

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
5. Book value per common share equals a. total common shareholders’ equity divided by the number...
5. Book value per common share equals a. total common shareholders’ equity divided by the number of shares outstanding on the date of the balance sheet. b. total common shareholders’ equity divided by the weighted-average number of shares outstanding during the accounting period. c. total common shareholders’ equity divided by the number of shares outstanding on the beginning date of the income statement. d. total shareholders’ equity divided by the number of shares outstanding on the date of the balance...
6. Earnings per Share with Convertible Bonds On January 1, 2019, Houston Company issued, at par,...
6. Earnings per Share with Convertible Bonds On January 1, 2019, Houston Company issued, at par, 600 $1,000 6% bonds. Each bond is convertible into 10 shares of common stock. Houston’s net income for 2019 was $600,000. The tax rate was 20%. Throughout 2019, 100,000 shares of $10 par common stock were outstanding. In addition, 1,000 shares of 5% $100 par cumulative preferred stock were outstanding. No preferred stock dividends were declared during 2019. None of the bonds were converted...
In regards to the presentation of EPS, IFRS requires 1. earnings per share amounts to be...
In regards to the presentation of EPS, IFRS requires 1. earnings per share amounts to be shown for all periods that are presented. 2. If there has been a stock dividend or stock split, all per share amounts of prior period earnings should be restated using the new number of outstanding shares. 3. If diluted EPS data are reported for at least one period, they should be reported for all periods that are presented, even if they are the same...
Earnings per Share Lucky Corporation began the year with a simple capital structure consisting of 200,000...
Earnings per Share Lucky Corporation began the year with a simple capital structure consisting of 200,000 shares of outstanding common stock. On April 1, 10,000 additional common shares were issued, and another 30,000 common shares were issued on August 1. The company had net income for the year of $572,000. Calculate the earnings per share of common stock. Round to two decimal points. Earnings per Share $Answer
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
24. In computing earnings per share for a simple capital structure, if the preferred stock is...
24. In computing earnings per share for a simple capital structure, if the preferred stock is cumulative, the amount that should be deducted as an adjustment to the numerator (earnings) is the preferred dividends in arrears. preferred dividends in arrears times (one minus the income tax rate). annual preferred dividend times (one minus the income tax rate). annual preferred dividend.
SHOW SOLUTION 13. Absolute Corporation has a capital structure that consists of 65% equity and 35%...
SHOW SOLUTION 13. Absolute Corporation has a capital structure that consists of 65% equity and 35% debt. The company expects to report P100 million in net income this year, and 67.5% of the net income will be paid out as dividends. How large can the firm's capital budget be this year without it having to include the cost of new common stock in its cost of capital analysis? a. P100.0 million b. P 67.5 million                                             c. P 50.0 million...
DMH Enterprises recently hired you to estimate their cost of capital. The firm’s capital structure consists...
DMH Enterprises recently hired you to estimate their cost of capital. The firm’s capital structure consists 40% debt, 10% preferred stock and 50% common stock. The firm has outstanding bonds with 15 years left to maturity, par value of $1,000 and an annual coupon of 6%. The bonds currently trade for $695.76. The firm's preferred stock is currently selling for $63.64 and pays a dividend of $7. The firm does not plan on issuing new shares of common equity. It...
James Company requires capital to be used for investment funding of $ 2,000,000,000, - which consists...
James Company requires capital to be used for investment funding of $ 2,000,000,000, - which consists of several sources of funds. The following is the amount of each of these funding sources: 1. Long Term Debt (in the form of bonds) The amount of funding from the Long-Term Debt is $. 500,000,000, -, with a nominal value of $ 500,000 per sheet. The interest given is 20% per year with a bond term of 5 (five) years. The selling price...
When is a company required to show diluted earnings per share? a) Always b) Only when...
When is a company required to show diluted earnings per share? a) Always b) Only when diluted earnings per share is less than basic earnings per share. c) Only when diluted earnings per share is greater than basic earnings per share. d) Only if the company has other comprehensive loss.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT