In determining earnings per share,undeclared annual dividends on convertiblecumulative preferred stock should:a. Result in no net effect on the numerator.b.Be added back to net income in thenumerator whether declared or not forDiluted EPS.c. Be added from the denominator whetherdeclared or not for Basic EPS.d.B&C

While calculating the earnings per share we need to consider the preferred dividend.

leclared annual dividends on converti hulative preferred stock should: esult in no net effect on the numerato e added back to net income in the umerator whether declared or not for iluted EPS. e added from the denominator wheth eclared or not for Basic EPS. &C

leclared annual dividends on converti hulative preferred stock should: esult in no net effect on the numerato e added back to net income in the umerator whether declared or not for iluted EPS. e added from the denominator wheth eclared or not for Basic EPS. &C

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

In determining earnings per share,
undeclared annual dividends on convertible
cumulative preferred stock should:
a. Result in no net effect on the numerator.
b.Be added back to net income in the
numerator whether declared or not for
Diluted EPS.
c. Be added from the denominator whether
declared or not for Basic EPS.
d.B&C

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