d. ali of these. Dun3luln Ugation and expense. provides a realstic 4.The interest on the projected benefit obligation component of pension expense a. reflects the incremental borrowing rate of the employer. b. reflects the rates at which pension benefits could be effectively settled. c. is the same as the expected return on plan assets. d. may be stated implicitiy or explicitly when reported. 5 Preferred dividends are subtracted from earnings when computing earnings per share whether or not the dividends are deciared or paid if the preferred stock is: a. Callable. b. Convertible. c. Participating. d. Cumulative. 6 A simple capital structure might include: a. Stock rights. b. Convertible bonds. c. Nonconvertible preferred stock. d. Stock purchase warants. 7.lf preferred stock is cumulative and no dividends are deciared, the company subtracts the current year preferred dividend in computing earnings per share. TRUE FALSE 8. When stock dividends or stock splits occur, companies must restate the shares outstand- ing after the stock dividend or split, in order to compute the weighted-average number of shares. TRUE FALSE 9. Dilutive convertible bonds affect both the numerator and the denominator in computing diluted EPS. TRUE FALSE 10. Stock options will be dilutive and included in the calculation of dilutive EPS if the exercise TRUE FALSE price is greater than the average market value of the stock. 11.In stock optio n, compensation is measured as the book value of the stock option at the grant date and then debited to compensation expense and credited to stock option for the total mount. TRUE FALSE 2. Total compensation as estimated by the option pricing model is reported as compensation xpense over the service period for which the option was give. TRUE FALSE umulative. e A simple capital structure might include: a. Stock rights. b. Convertible bonds. c. Nonconvertible preferred stock d. Stock purchase warrants. 7.If prefered stock is cumulative and no dividends are declared, the company subtracts the current year preferred dividend in computing earnings per share. TRUE FALSE 8. When stock dividends or stock splits occur, companies must restate the shares outstand- ing after the stock dividend or split, in order to compute the weighted-average number of shares. TRUE FALSE 9. Dilutive convertible bonds affect both the numerator and the denominator in computing diluted EPS. TRUE FALSE 10. Stock options will be dilutive and included in the calculation of dilutive EPS if the exercise price is greater than the average market value of the stock. TRUE FALSE 11.In stock option, compensation is measured as the book value of the stock option at the grar date and then debited to compensation expense and credited to stock option for the total mount. TRUE FALSE 12. Total compensation as estimated by the option pricing model is reported as compensation FALSE TRUE expense over the service period for which the option was give
