To Calculate EPS,Net Income Less Preferred Dividends Is Divided by the Number

question 29

True/False

To calculate EPS,Net Income less Preferred Dividends is divided by the number of outstanding common shares at the end of the fiscal year.

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Definitions:

Debt-Equity Ratio

A calculation of a firm's financial leverage determined by dividing its overall liabilities by the equity of its shareholders.

Interest Tax Shield

The reduction in income taxes that results from the deductibility of interest payments from taxable income.

Capital Structure

The combination of debt and equity financing that a company uses to fund its operations and growth.