Assume Basic EPS Has Been Determined

question 67

Multiple Choice

Assume basic EPS has been determined.In determining the diluted earnings per share, the annual dividend on convertible noncumulative preferred shares, which are a dilutive convertible security, should be:

• A)Disregarded.
• B)Deducted from the numerator of basic EPS whether declared or not.
• C)Added back to the numerator of basic EPS only if declared.
• D)Added back to the numerator of basic EPS whether declared or not.

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Definitions:

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A unit of volume used primarily in the United States to measure liquids, equal to approximately 29.57 milliliters.

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