The Amount of Earnings Per Share Is Usually Computed

question 39

Multiple Choice

The amount of earnings per share is usually computed:

• A)For both preferred and common stock.
• B)For common stock by deducting the dividends on preferred stock from net income and dividing the remaining amount by the weighted average number of common shares outstanding.
• C)By dividing net income by the combined number of preferred and common shares.
• D)On the basis of the number of shares outstanding at year-end,regardless of changes in the number of shares during the year.

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Definitions:

Random Sample

A sampling method in which each member of a population has an equal chance of being included, ensuring that the sample represents the entire population.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true; a measure of the risk of a Type I error.

SRS

Simple Random Sampling, a method of selecting a sample in which each member of the population has an equal chance of being included.

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect exists between certain states or parameters in a population.