
Earnings per share: Earnings per share (EPS) indicate the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS.
The preference dividend is reduced from income in order to calculate income for EPS. The income is divided by weighted-average common shares outstanding. This is Basic EPS. Basic EPS does not consider the dilutive effects of convertible long-term debts. Diluted EPS is based on the assumption that for all convertible securities like preference shares, bonds will be exercised. The calculations of diluted EPS are more detailed than the Basic EPS.
(a) To find: To find the number of shares for the computation of basic EPS.
(b) To determine: To determine the number of shares used to compute diluted EPS.
(c) To compute: To compute adjusted net income for EPS.

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Chapter 16 Solutions
INTERMEDIATE ACCOUNTING W/ WILEYPLUS >
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