QUESTION 1 What is the difference between equity and liability options? Equity options can be settled for intrinsic value. Equity options increase reported Owners' Equity. Equity options can be used to purchase shares of stock. Equity options can only be used to purchase shares at a set price. QUESTION 2 What effect would antidilutive securities have on EPS if they were exercised? Antidilutive securities don't effect EPS. O Antidilutive securities reduce EPS. Antidilutive securities increase EPS. Antidilutive securities can increase or reduce EPS, depending on the nature of the security. QUESTION 3 At December 31, Year 4, Hancock Company had 500,000 shares of common stock issued and outstanding, 400,000 of which had been issued and outstanding throughout the year and 100,000 of which were issued on October 1, 2014. Net income for the year ended December 31, Year 4, was $1,360,000. What should be Hancock's Year 4 earnings per common share, rounded to the nearest penny? O $3.20 $3.03 $3.40 $2.69