Corporations with complex capital structures report:
A) basic and diluted EPS.
B) basic EPS.
C) diluted EPS.
D) nothing. EPS is not reported.

Question

Quizplus · Accepted Answer

Corporations with complex capital structures, such as those with convertible securities or options, must report both basic and diluted EPS to provide investors with a better understanding of the potential impact of these securities on earnings per share. Basic EPS only takes into account the common shares outstanding while diluted EPS also considers the potential impact of convertible securities or options that could be exercised, which would increase the number of outstanding shares. Reporting only basic EPS or not reporting EPS at all would not provide a complete picture of the corporation's earnings per share.

Corporations with Complex Capital Structures Report