A Preferred Dividend Claim Should Be Subtracted from Income to Compute

question 21

Multiple Choice

A preferred dividend claim should be subtracted from income to compute basic EPS if the preferred shares are:

• A) Noncumulative, nonconvertible, and a dividend has not been declared; however, a dividend was paid this year in fulfillment of the obligation from last year's declaration.
• B) Noncumulative, nonconvertible, and the company would like to declare a dividend; however, by law they can't because of a debit balance in the retained earnings account.
• C) Noncumulative, nonconvertible, non-participating, and the dividend has been declared.
• D) Participating, nonconvertible, noncumulative, and the dividend has not been declared.

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Definitions:

Future Sales Volume

An estimation of the quantity of goods or services that a company expects to sell in a future period.

Marketing Mix

The mix of elements a company can manage to encourage consumers to buy its offerings, commonly recognized as the 4Ps: product, price, place, and promotion.

Market Forecast

The projection or estimation of future market trends, sizes, and characteristics based on current and historical data.

Sales in An Industry

The total volume or value of all products or services sold within a specific industry over a certain period.