hybrid costing

hybrid costing - regardless of how high the market price...

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Reporting earnings Answer: d Diff: E i . Which of the following are methods of reporting earnings when warrants or convertibles are outstanding? a. Basic EPS. b. Primary EPS. c. Diluted EPS. d. All of the statements above are correct. e. None of the statements above is correct. Reporting earnings Answer: d Diff: E ii . Which of the following methods of reporting earnings when warrants or convertibles are outstanding are required under SEC rules? a. Basic EPS. b. Primary EPS. c. Diluted EPS. d. Statements a and c are correct. e. All of the statements above are correct. Warrants Answer: e Diff: E N iii . Which of the following statements concerning warrants is most correct? a. Warrants cannot be traded separately from the bond with which they are associated. b. A warrant is a long-term option to buy a stated number of shares of common stock at a specified price. c. Warrants are long-term call options that have value because holders can buy the firm’s common stock at the exercise price
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Unformatted text preview: regardless of how high the market price climbs. d. Statements a, b, and c are correct. e. Statements b and c are correct. Medium: Lease decision Answer: e Diff: M iv . In the lease versus buy decision, leasing is often preferable a. Since it does not limit the firms ability to borrow to make other investments. b. Because, generally, no down payment is required, and there are no indirect interest costs. c. Because lease obligations do not affect the riskiness of the firm. d. All of the statements above are correct. e. None of the statements above is correct. i . Reporting earnings Answer: d Diff: E ii . Reporting earnings Answer: d Diff: E iii . Warrants Answer: e Diff: E N Statement a is not correct. Warrants can be detached from the bonds with which they are associated and can be traded separately from the bond. iv . Lease decision Answer: e Diff: M...
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This note was uploaded on 08/04/2011 for the course COMM 101 taught by Professor Sy during the Spring '11 term at USC.

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hybrid costing - regardless of how high the market price...

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