Which Statement Concerning Earnings Per Share Is Incorrect

question 55

Multiple Choice

Which statement concerning earnings per share is incorrect?

• A) It represents a conversion of the absolute dollar amount of profit to a per share basis.
• B) Even if profits increase earnings per share could decrease if share capital increases at a greater rate than profits.
• C) Earnings per share is regarded as one of the least important financial ratios.
• D) In calculating earnings per ordinary share, preference dividends are deducted from profit.

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