Question

With respect to the computation of earnings per share, which of the following would be most indicative of a simple capital structure?

a. Common stock, preferred stock, and convertible securities outstanding in lots of even thousands
b. Earnings derived from one primary line of business
c. Ownership interest consisting solely of common stock
d. None of these

Answer 1

Ownership interest consisting solely of common stock is most indicative of a simple capital structure for computing earnings per share.

Step-by-step explanation:

The most indicative of a simple capital structure with respect to earnings per share would be ownership interest consisting solely of common stock. In a simple capital structure, there are no potentially dilutive securities such as preferred stock or convertible securities. By having only common stock outstanding, the calculation of earnings per share becomes straightforward, as there are no complex adjustments needed.