Asked by Diana Imangeldieva on May 04, 2024
Verified
Earnings per share is calculated by dividing net income by the weighted-average number of shares of preferred stock and common stock outstanding.
Weighted-Average Number
A calculation that takes into account the varying degrees of importance of the numbers in a data set, used to find a kind of average that considers weight.
Preferred Stock
A type of stock that grants holders priority for dividend payments and, in some cases, priority in asset liquidation over common stockholders.
- Acquire knowledge on the calculation and documentation of earnings per share (EPS) across diverse stock categories.
Verified Answer
JD
Jitesh DeshpandeMay 06, 2024
Final Answer :
False
Explanation :
Earnings per share is calculated by dividing net income by the weighted-average number of shares of only common stock outstanding, not including preferred stock.
Learning Objectives
- Acquire knowledge on the calculation and documentation of earnings per share (EPS) across diverse stock categories.