NO.PZ2019120301000035
问题如下:
Laurelli Builders (LB) reported the following financial data for year-end 31 December:
选项:
A.LB’s basic EPS is $1.12.
B.LB’s diluted EPS is equal to or less than its basic EPS.
C.The weighted average number of shares outstanding is 2,210,000.
解释:
SolutionB is correct. LB has warrants in its capital structure; if the exercise price is less than the weighted average market price during the year, the effect of their conversion is to increase the weighted average number of common shares outstanding, causing diluted EPS to be lower than basic EPS. If the exercise price is equal to the weighted average market price, the number of shares issued equals the number of shares repurchased. Therefore, the weighted average number of common shares outstanding is not affected and diluted EPS equals basic EPS. If the exercise price is greater than the weighted average market price, the effect of their conversion is anti-dilutive. As such, they are not included in the calculation of basic EPS. LB’s basic EPS is $1.22 [= ($3,350,000 – $430,000)/2,400,000]. Stock dividends are treated as having been issued retroactively to the beginning of the period.
老师,B选项的答案解析能翻译下吗