When Calculating Earnings Per Share, Preferred Dividends Are

question 103

Multiple Choice

When calculating earnings per share, preferred dividends are:

• A)added to net income in the numerator of the EPS calculation.
• B)added to common shares in the denominator of the EPS calculation.
• C)subtracted from common shares in the denominator of the EPS calculation.
• D)subtracted from net income in the numerator of the EPS calculation.

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Definitions:

Full Force And Effect

A legal term indicating that all terms of a contract or law are currently active and enforceable.

Financing

The act of providing funds for business activities, making purchases, or investing.

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A contract termination because an unforeseen event makes contractual obligations impossible to perform or drastically changes the party's principal purpose for entering into the contract.

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An indication that one party intends not to fulfil their contractual obligations before the time of performance is due.