A Company Already Has Calculated Its Basic Earnings Per Share

question 12

Multiple Choice

A company already has calculated its basic earnings per share (EPS) .In determining diluted earnings per share,the annual dividend on convertible cumulative preferred stock which is dilutive should be

• A) added back to the number of basic EPS whether declared or not.
• B) deducted from the numerator of basic EPS only if declared.
• C) added back to the numerator of basic EPS only if declared.
• D) deducted from the numerator of basic EPS whether declared or not.

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Definitions:

Arachnids

Eight-legged arthropods, such as spiders, scorpions, ticks, and mites.

True Coelom

A body cavity completely lined by mesoderm, found in most multicellular animals, facilitating the development of more complex structures.

Open Circulatory System

A type of circulatory system in which the blood bathes the tissues directly; characteristic of arthropods and many mollusks. Compare with closed circulatory system.

Arthropods

Invertebrate animals having an exoskeleton, a segmented body, and paired jointed appendages, including insects, arachnids, and crustaceans.