Which of the Following Is the Reason That Preferred Dividends

question 147

Multiple Choice

Which of the following is the reason that preferred dividends are deducted from net income in calculating earnings per share?

• A)They are not paid from net income.
• B)They are not a part of stockholders' equity.
• C)They are paid to preferred stockholders, not common stockholders.
• D)They are not paid until all common stockholders have received their dividends, so preferred dividends are not relevant in the formula and so must be taken out of the equation.

---

Definitions:

Two-Part Tariff

A pricing method that involves a fixed fee plus a variable charge based on the quantity of goods or services consumed.

Peak-Load Pricing

Peak-load pricing is a pricing strategy where prices are higher during periods of high demand and lower during periods of low demand to manage demand and maximize profits.

Intertemporal Price Discrimination

A pricing strategy where businesses charge different prices for the same product or service at different times to maximize profits.

Vacation Packages

Pre-arranged travel plans combining elements like accommodation, transportation, and activities into a single purchase, often offering cost savings.