How Is Earnings Per Common Share Calculated

question 24

Multiple Choice

How is earnings per common share calculated?

• A)Operating profit divided by the average number of common stock shares outstanding.
• B)Net profit divided by the average number of common and preferred stock shares outstanding.
• C)Operating profit divided by the average number of repurchased common stock shares.
• D)Net profit divided by the average number of common stock shares outstanding.

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Definitions:

Nomothetic

An approach in psychology that seeks to produce general statements and universal laws of behavior through the study of large groups.

Reliability

The degree to which an assessment tool produces stable and consistent results over repeated use.

Validity

The extent to which a test or instrument measures what it is supposed to measure.

Self-Esteem

An individual's subjective evaluation of their own worth, encompassing beliefs and emotions about oneself.