ECO 444 EPS Test Bank-No answers

ECO 444 EPS Test Bank-No answers - DILUTIVE SECURITIES AND...

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DILUTIVE SECURITIES AND EARNINGS PER SHARE MULTIPLE CHOICE —Dilutive Securities—Conceptual 1. Convertible bonds a. have priority over other indebtedness. b. are usually secured by a first or second mortgage. c. pay interest only in the event earnings are sufficient to cover the interest. d. may be exchanged for equity securities. 2. The conversion of bonds is most commonly recorded by the a. incremental method. b. proportional method. c. market value method. d. book value method. 3. Gains or losses on the early extinguishment of convertible debt should be considered an 4. The conversion of preferred stock may be recorded by the 5. When the cash proceeds from a bond issued with detachable stock warrants exceeds the sum of the par value of the bonds and the fair market value of the warrants, the excess should be credited to 6. Proceeds from an issue of debt securities having stock warrants should not be allocated between debt and equity features when a. the market value of the warrants is not readily available. b. exercise of the warrants within the next few fiscal periods seems remote. c. the allocation would result in a discount on the debt security. d. the warrants issued with the debt securities are nondetachable. 7. Stock warrants outstanding should be classified as
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8. The date on which to measure the compensation element in a stock option granted to a corporate employee ordinarily is the date on which the employee 9. Compensation expense resulting from a compensatory stock option plan is generally 10. The date on which total compensation expense is computed in a stock option plan is the date a. of grant. b. of exercise. c. that the market price coincides with the option price. c. that the market price exceeds the option price.
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