Which of the Following Is the Reason That Preferred Dividends

question 19

Multiple Choice

Which of the following is the reason that preferred dividends are deducted from net income in calculating earnings per share?

• A)Because preferred dividends are not paid from net income.
• B)Because preferred dividends are not a part of stockholders' equity.
• C)Because preferred dividends are paid to preferred stockholders,not common stockholders.
• D)Because preferred dividends are not paid until all common stockholders have received their dividends,so preferred dividends are not relevant in the formula and so must be taken out of the equation.

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Definitions:

Voting Paradox

A situation in collective decision-making where individual preferences do not result in a consistent collective order of preferences, showing the complexity of social choice.

Impossibility Theorem

A theory stating that no rank-order voting system can meet certain desirable criteria, famously outlined by Kenneth Arrow.

Majority Rule Voting

A decision-making process where policies, leaders, or propositions are decided based on receiving more than half of the total votes cast.

Logrolling

A practice in politics where individuals or parties exchange support for each other's proposals or legislation.