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

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

a. Common stock, preferred stock, and convertible securities outstanding in lots of even thousands
b. Earnings derived from one primary line of business
c. Ownership interest consisting solely of common stock
d. None of these


Answer: Ownership interest consisting solely of common stock

Which of the following is not a characteristic of a noncompensatory stock purchase plan?

a. It is open to almost all full-time employees.
b. The discount from market price is small.
c. The plan offers no substantive option feature.
d. All of these are characteristics.


Answer: All of these are characteristics

What effect will the acquisition of treasury stock have on stockholders' equity and earnings per share, respectively?

a. Decrease and no effect
b. Increase and no effect
c. Decrease and increase
d. Increase and decrease


Answer: Decrease and increase