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.

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Definitions:

Standard Deviation

A statistical metric that quantifies the variability or spread in a dataset or distribution.

Income Tax Returns

Documents filed with the government that report income, expenditures, and taxes owed for a specific year, used by individuals and entities.

Standard Deviation

A strategy to evaluate the amount of deviation or spread among a collection of numbers.

Normally Distributed

A description of a dataset whose distribution forms a symmetrical bell-shaped curve, characterized by its mean and standard deviation.