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4. Adjustments for dilutive securities and the adjustment to weighted average number of shares outstanding presumes that the dilutive securities are converted to common shares:
4. Adjustments for dilutive securities and the adjustment to weighted average number of shares outstanding presumes that the dilutive securities are converted to common shares: a. as of the beginning of the year. b. as of the end of the year. c. as of the middle of the year. d. as of the point in time where the maximum number of shares are outstanding. To calculate diluted EPS, the accountant does all of the following except: a. adds back to net income any compensation expense recognized on the employee stock options b. adds back any interest expense (net of taxes) on convertible bonds c. adds back any dividends on convertible preferred stock the firm subtracted in computing net income to common shareholders. d. enters only the net incremental shares issued (shares issued under options minus assumed shares repurchased) in the computation of diluted EPS. 13. Doran Corp. has a current ratio of 6. Under which of the following scenarios might this indicate a problem? a. inventories are increasing due to the introduction of a new product b. the company is holding cash in expectation of making a large investment in equipment C. receivables are increasing due to increasing sales d. inventories are increasing and the industry in which Doran Corp. operates is experiencing a recession
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