In Calculating Basic Earnings Per Share, If the Preferred Shares

question 47

Multiple Choice

In calculating basic earnings per share, if the preferred shares are cumulative, the amount that should be deducted as an adjustment to the numerator is the

• A) annual preferred dividend.
• B) preferred dividends in arrears.
• C) annual preferred dividend times (one minus the income tax rate).
• D) preferred dividends in arrears times (one minus the income tax rate).

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