Which of the Following Is the Basic Formula for Earnings

question 21

Multiple Choice

Which of the following is the basic formula for earnings per share?

• A)Net income ÷ Average number of shares of common shares outstanding
• B)Net income ÷ Ending number of shares of common shares outstanding
• C)Net income ÷ Beginning number of shares of common shares outstanding
• D)Net income ÷ Total number of shares of common shares outstanding

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Definitions:

Rent-Seeking Behavior

Rent-seeking behavior occurs when individuals or firms seek to increase their own wealth without contributing to productivity, often through political manipulation or monopolistic practices.

Government Policies

Actions and principles that a government follows or implements to achieve certain goals in the country's social, economic, and foreign affairs.

Extra Profit

Additional earnings that exceed the normal expected profit from business activities.

Rent-Seeking Behavior

Actions by individuals or firms aimed at manipulating the political or economic environment to acquire unearned income or profits.