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Answer: A,D
NEW QUESTION: 2
Which of the following statements regarding the treasury stock method of computing outstanding shares is FALSE? The treasury stock method:
A. reduces the total number of shares created by the hypothetical exercise of the options into common stock.
B. assumes that the hypothetical funds received by the company from the exercise of the options are used to sell shares of the company's common stock in the market at the average market price.
C. is used when the exercise price of the option is less than the average market price.
Answer: B
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