Assume Basic EPS Has Been Determined

question 152

Multiple Choice

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

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

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Definitions:

Employee Leasing

The practice of hiring workers through a third-party organization which handles various HR tasks such as payroll and benefits administration.

WARN Act

The Worker Adjustment and Retraining Notification Act that requires employers to provide notice in advance of certain plant closings and mass layoffs.

Employee Leasing

A staffing arrangement where a leasing firm hires and manages employees, then contracts them out to work for another company, effectively outsourcing the HR functions.

Voluntary Early Retirement

A program offered by employers allowing employees to retire earlier than the traditional retirement age, often with full or partial benefits.