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  • Exam Code: ENOV613X-PRG
  • Exam Name: V6 ENOVIA Program Central (V6R2013X)
  • Version: V12.35
  • Q & A: 117 Questions and Answers

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How will dilutive securities affect a firm's diluted earnings per share (EPS)?
A. Neither raise nor lower EPS.
B. Lower EPS.
C. Either lower or raise EPS depending upon if the security is dilutive or antidilutive.
Answer: B
Dilutive securities such as convertibles and options are found in a complex capital structure and always lower EPS. Convertibles and options may also be antidilutive, which will raise EPS hence the name antidilutive. The only way to know if a security is dilutive or antidilutive is to compare the basic EPS to diluted EPS. If the diluted EPS is higher than the basic EPS then the security is antidulutive and should not be included when determining diluted EPS.

According to the chart, during which year were annual sales of oral medication for disease X less than
during the previous year?

A. 0
B. 1
C. 2
D. 3
E. 4
Answer: B
For each year, the gray portion of the bar indicates sales of oral injection medication. In 1991,
those sales clearly totaled more than $1 million, but in 1992 they totaled no more than $1 million.

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