Which One of the Following Statements About Earnings Per Share

question 163

Multiple Choice

Which one of the following statements about earnings per share (EPS) is correct?

• A) The EPS ratio is important because it signals the ability of the company to pay future dividends, which investors factor into the stock price.
• B) Earnings per share (EPS) is generally reported in the balance sheet under stockholders' equity.
• C) Earnings per share (EPS) is the best way to compare the performance of different companies.
• D) EPS, in its basic form, is calculated by dividing net income by the average number of common shares issued.

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Definitions:

Taxable Item

A taxable item is any product or service subject to tax by governing authorities when sold or purchased.

Founders' Agreement

A legal document outlining the roles, responsibilities, and equity ownership of the founding members of a company.

Less Technical

Pertaining to or characterized by a simpler understanding or approach that doesn't heavily rely on specialized knowledge or complexities.

Key Issues

Central or most important problems, questions, or concerns that require attention or resolution.