Earnings Per Share Is Computed as Net Income

question 20

Multiple Choice

Earnings per share is computed as net income:

• A) Minus preferred dividends divided by the ending common shares outstanding
• B) Minus preferred dividends divided by the weighted average of common shares outstanding
• C) Divided by the weighted average of common shares outstanding
• D) Divided by the ending common shares outstanding

---

Definitions:

Oligopoly

An economic scenario in which a few large companies control the majority of the industry, resulting in minimal competition and possibly increased prices for buyers.

Profit

The financial gain made in a transaction or operation, calculated as total revenues minus total costs.

Cartel

A group of independent market participants who collude to raise prices, limit supply or otherwise manipulate market conditions in their favor.

Quantity Effect

the change in the quantity of goods sold or consumed as a result of a change in price, holding other factors constant.