Basic earnings per share is computed on the basis of:

Group of answer choices

A weighted average of the number of common shares outstanding during the year.

A weighted average of the number of preferred and common shares outstanding during the year.

The number of common shares outstanding at the end of the year.

The number of common and preferred shares outstanding at the end of the year.

2.

Which of the following statements is correct?

Group of answer choices

Basic EPS is a historical figure while diluted EPS is a hypothetical figure.

Basic EPS is hypothetical figure while diluted EPS is a historical figure.

Basic and diluted EPS are both historical figures.

Basic and diluted EPS are both hypothetical figures.

3.

Diluted EPS recalculates EPS as though the conversions of convertible securities had taken place at the earliest possible date during the year

Group of answer choices

True

False

4.

Options are in-the-money if the exercise price is higher that the market value of common shares.

Group of answer choices

True

False

5.

The treasury stock method is only used for options, and only the denominator is affected.

Group of answer choices

True

False

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