Preferred Dividends Would Not Be Subtracted from Earnings When Computing

question 76

Multiple Choice

Preferred dividends would not be subtracted from earnings when computing earnings per share in a year when the dividends are not declared if the preferred stock is:

• A)Noncumulative.
• B)Convertible.
• C)Participating.
• D)Cumulative.

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Definitions:

APS

The Average Propensity to Save, which is the proportion of income that households save rather than consume.

MPC

The marginal propensity to consume, which is the portion of additional income that a consumer spends on goods and services.

Consumption

The total value of goods and services consumed by households and businesses.

APC

Average Propensity to Consume, the fraction of total disposable income that households plan to spend on consumption as opposed to saving.