medium · Financial Accounting stockholders-equity
In a period of rising stock prices, how does the cost method of treasury stock affect the calculation of Basic Earnings Per Share (EPS)?
- It has no effect because treasury shares are still 'Issued'
- It increases EPS by reducing the number of shares in the denominator
- It decreases EPS by reducing Net Income through reissuance losses
- It increases EPS by recognizing unrealized gains in the numerator
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