QUESTION: 117

Continuing the above example, if earnings were $30, 000, earning per share would be:

$2.50
$3.00
$4.00
$2.25

Answer(s): A

Book value per share is based on the number of shares outstanding at the end of accounting period rather than the weighted average used in computing earning per share. Also, book value normally is computed without considering:

Treasury stock
Possible dilutive effects of conversions
Maximum potential dilution
Anti-dilutives and their effects

Answer(s): B

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QUESTION: 119

Situations commonly requiring the valuation of option are all of the following EXCEPT:

When the option is designed, granted exchanged, or terminated
When financial statement disclosure requires that the option value is recognized
When the option value is at issue in a damage suit, such as a breach of contract suit between an existing or former executive and the issuing company
When the option is a repurchased option by the OTC market

Answer(s): D

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