ACC 302 Test 2 Questions and Correct
Answers
A business is deemed to have a complex capital structure when it has outstanding:
Multiple Choice
-Executive stock options.
-Bonds payable.
-Three types of securities or more besides common stock.
-Cumulative preferred stock.
-Executive stock options.
A company granted 30 million of its $1 par common shares to executives, subject to
forfeiture if employment is terminated within three years. The common shares have a
market price of $8 per share on the grant date. Ignoring taxes, what is the effect on
earnings in the year after the shares are granted to executives?
$240 million.
$30 million.
$0.
$80 million.
$80 million.
$8 fair value per share ×30million shares granted =$240million fair value of award
, 240mill / 3 = 80mil
Which of the following is not disclosed regarding earnings per share?
Multiple Choice
-Cash paid per share.
-Reconciliation of the numerator and denominator used in the computations.
-Basic EPS for income from continuing operations.
-Diluted EPS for net income.
-Cash paid per share.
The compensation associated with restricted stock units (RSUs) under a stock award
plan is:
Multiple Choice
-Allocated to expense over the service period which usually is the vesting period.
-The estimated fair value of a share of similar stock times the number of shares
represented by the RSUs.
-The book value of an unrestricted share of the same stock times the number of shares
represented by the RSUs.
-The book value of a share of similar stock times the number of shares represented by
the RSUs.
-Allocated to expense over the service period which usually is the vesting period.
Answers
A business is deemed to have a complex capital structure when it has outstanding:
Multiple Choice
-Executive stock options.
-Bonds payable.
-Three types of securities or more besides common stock.
-Cumulative preferred stock.
-Executive stock options.
A company granted 30 million of its $1 par common shares to executives, subject to
forfeiture if employment is terminated within three years. The common shares have a
market price of $8 per share on the grant date. Ignoring taxes, what is the effect on
earnings in the year after the shares are granted to executives?
$240 million.
$30 million.
$0.
$80 million.
$80 million.
$8 fair value per share ×30million shares granted =$240million fair value of award
, 240mill / 3 = 80mil
Which of the following is not disclosed regarding earnings per share?
Multiple Choice
-Cash paid per share.
-Reconciliation of the numerator and denominator used in the computations.
-Basic EPS for income from continuing operations.
-Diluted EPS for net income.
-Cash paid per share.
The compensation associated with restricted stock units (RSUs) under a stock award
plan is:
Multiple Choice
-Allocated to expense over the service period which usually is the vesting period.
-The estimated fair value of a share of similar stock times the number of shares
represented by the RSUs.
-The book value of an unrestricted share of the same stock times the number of shares
represented by the RSUs.
-The book value of a share of similar stock times the number of shares represented by
the RSUs.
-Allocated to expense over the service period which usually is the vesting period.
