Which of the Following Mathematical Expressions Computes Earnings Per Share

question 2

Multiple Choice

Which of the following mathematical expressions computes earnings per share?

• A) Earnings per share = Net Income × Number of outstanding shares of common stock
• B) Earnings per share = (Net Income + Dividend Paid) ÷ Number of outstanding shares of common stock
• C) Earnings per share = Net Income ÷ Number of outstanding shares of common stock
• D) Earnings per share = (Net Income - Dividend Paid) ÷ Number of outstanding shares of common stock
• E) Earnings per share = (Net Income - Dividend Paid) × Number of outstanding shares of common stock

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Definitions:

Maturity

Maturity is the time at which a financial instrument, such as a bond or loan, reaches its due date and must be repaid or redeemed.

Term to Maturity

The remaining time until a financial instrument's principal amount is due to be repaid.

Net Basis

A method of reporting income and expenses where they are netted against each other, showing only the net amount instead of reporting them separately.

Cash Receipts

Money received by a business, typically documented during the accounting period in which it is received.