When a Corporation Has Outstanding Both Common and Preferred Stock

question 20

Multiple Choice

When a corporation has outstanding both common and preferred stock:

• A) Basic and diluted earnings per share are reported only if the preferred stock is cumulative.
• B) Earnings per share are reported for each type of stock outstanding.
• C) Earnings per share are computed without regard to the amount of dividends declared on preferred stock.
• D) Earnings per share are computed without regard to the amount of dividends declared on common stock.

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Definitions:

In Personam Jurisdiction

The legal authority of a court to make a decision affecting a particular person's rights.

Long-Arm Statute

A state statute that permits a state to obtain jurisdiction over nonresidents. The nonresidents must have certain "minimum contacts" with that state for the statute to apply.

Geographic Area

A specific physical location defined by natural or artificial boundaries.

Federal-Question Jurisdiction

pertains to the authority of federal courts to hear cases that involve the interpretation and application of the U.S. Constitution, federal laws, or treaties.