CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 92 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 92
Topic #: 1

The basic earning per share computed by a company for year ended 31st March 20X7 is 2 per share. The company had certain convertible debentures outstanding as on 31st March 20X7. The conversion of debentures to equity shares would result in the earnings per share to be 2.2. Which of the following should the company disclose?

ABasic earnings per share only

BDiluted earnings per share only

CBoth basic and diluted earnings per share

DNeither basic nor diluted earnings per share

Show Suggested Answer

Suggested Answer: A

by Annice at Jul 10, 2024, 03:35 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F02-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Wayne

4 months ago

Not necessarily. It gives investors a clearer picture of the company's financial performance.

upvoted 0 times

...

Nobuko

4 months ago

Option C, no doubt. Hiding the diluted EPS would be like wearing a clown costume to a job interview - it just doesn't make sense.

upvoted 0 times

Joana

2 months ago

C) Both basic and diluted earnings per share

upvoted 0 times

...

Lenny

2 months ago

B) Diluted earnings per share only

upvoted 0 times

...

Domonique

3 months ago

A) Basic earnings per share only

upvoted 0 times

...

Glenna

3 months ago

C) Both basic and diluted earnings per share

upvoted 0 times

...

Dorsey

3 months ago

B) Diluted earnings per share only

upvoted 0 times

...

Art

3 months ago

A) Basic earnings per share only

upvoted 0 times

...

Annelle

4 months ago

I'll go with C as well. Transparency is key, and the company shouldn't try to sugarcoat the numbers. Diluted EPS is important for investors to make informed decisions.

upvoted 0 times

Quentin

3 months ago

B) Diluted earnings per share only

upvoted 0 times

...

Eloisa

4 months ago

A) Basic earnings per share only

upvoted 0 times

...

Leana

4 months ago

But wouldn't disclosing both basic and diluted earnings per share be redundant?

upvoted 0 times

...

Oretha

4 months ago

Hmm, this seems straightforward. If the conversion of debentures results in a higher EPS, the company should definitely disclose both basic and diluted EPS. Anything less would be like hiding the good news!

upvoted 0 times

...

Earleen

4 months ago

I agree with Wayne. It's important to provide investors with all relevant information.

upvoted 0 times

...

Melodie

4 months ago

I think the correct answer is C. The company should disclose both basic and diluted earnings per share to provide a complete picture of its financial performance.

upvoted 0 times