Chpt_16_Solutions - 17. (a) Basic earnings per share is the...

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17. (a) Basic earnings per share is the amount of earnings for the period available to each share of common stock outstanding during the reporting period. (b) A potentially dilutive security is a security which can be exchanged for or converted into common stock and therefore upon conversion or exercise could dilute (or decrease) earnings per share. Included in this category are convertible securities, options, warrants, and other rights. (c) Diluted earnings per share is the amount of earnings for the period available to each share of common stock outstanding and to each share that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during the reporting period. (d) A complex capital structure exists whenever a company’s capital structure includes dilutive securities. (e) Potential common stock is not common stock in form but does enable its holders to obtain common stock upon exercise or conversion. 18.
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This note was uploaded on 11/12/2011 for the course ACCT 2015 taught by Professor Dr,moore during the Spring '10 term at University of the West Indies at Mona.

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Chpt_16_Solutions - 17. (a) Basic earnings per share is the...

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