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Basic Question 39 of 40
Which of the following concerning the treasury stock method is true?
B. The assumption of exercise in the treasury stock method is not realistic.
C. Changes in market price do not affect the value of the conversion feature.
D. The conversion or dilution will always occur.
A. The number of shares used for the earnings per share adjustment is usually equal to the number of actual shares exercised.
B. The assumption of exercise in the treasury stock method is not realistic.
C. Changes in market price do not affect the value of the conversion feature.
D. The conversion or dilution will always occur.
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Martin Rockenfeldt
Learning Outcome Statements
describe how earnings per share is calculated and calculate and interpret a company's basic and diluted earnings per share for companies with simple and complex capital structures including those with antidilutive securities
CFA® 2025 Level I Curriculum, Volume 2, Module 2.