Spring Test 2 Flashcards
When dividends are <25% of outstanding stock,
a) what are they considered to be?
b) what are the shares valued at?
a) small stock dividend
b) market value
When dividends are >25% of outstanding stock,
a) what are they considered to be?
b) what are the shares valued at?
a) large stock dividend
b) fair value
Dilutive securities include which two categories?
1) Convertibles
2) Options
Examples of Convertibles are:
Debt Securities: loan
Equity Securities: ownership
Convertible Debt: loaner can choose to receive stock instead of cash
Convertible Preferred Stock
Examples of Options are:
Stock Options: employees can receive stock
Stock Warranties: bonds can be converted into stock
Stock Appreciation Rights: when a company gives stock as a dividend, or if NI goes up a certain amount, you get a certain amount of dividend (cash or stock)
Anything that makes EPS go up is considered _____and is ______
Anti-dilutive, not reported
Anything that makes EPS go down is considered ______and is_____
Dilutive, reported
Which form of EPS must be reported and where?
Diluted EPS
Income Statement
Which organization oversees stock distributions?
Securities and Exchange Commission (SEC)
What is a script dividend?
Paid based off performance
What is a property dividend?
Can give assets including ownership in other companies
What is a stock dividend?
Give your own stock
When a stock split occurs, how is it accounted for?
Double the shares (if 2-for-1) and cut par value in half
If you have discontinued operations, do you have to report another EPS?
Yes
Which two types of stock-related activities are considered outstanding for the whole year (when calculating weighted-average)?
Stock splits
Stock dividends
When calculating EPS from Discontinued Operations, what must be done differently?
Do not use EPS formula.
Use this:
Basic EPS - EPS from Cont. OP.
Are you required to report Basic EPS?
NO
