Which of the Following Is the Formula for Computing Earnings

question 123

Multiple Choice

Which of the following is the formula for computing earnings per share of common stock?

• A)(Net income + interest expense)/ average total assets
• B)Net income/net sales
• C)(Net income - preferred dividends)/ number of shares of outstanding common stock
• D)(Net income - preferred dividends)/ average common stockholders' equity

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Definitions:

Foreign Competition

Competition that domestic companies face from abroad, from companies in other countries offering similar goods or services.

Union Membership

The status of being a member of a labor union, an organization aimed at representing the interests of employees in negotiations with employers.

Government Employees

Individuals who work in various departments and agencies of the government and are paid by the government.

Private-Sector Workers

Employees who work for businesses or organizations that are not owned or operated by the government.