Which statement is correct?
A)A simple capital structure includes potentially dilutive securities.
B)A simple capital structure excludes potentially dilutive securities.
C)EPS applies only to a company with a simple capital structure.
D)A company with a simple capital structure does not need to calculate EPS.

Question

Quizplus · Accepted Answer

A simple capital structure only includes common stock, nonconvertible preferred stock, and nonconvertible debt. Potentially dilutive securities such as stock options, warrants, and convertible bonds are excluded from a simple capital structure.

Which Statement Is Correct