To calculate the amount of net income assignable to common shareholders' equity, the analyst does not
A)subtract all amounts required to compensate other providers of financing for the use of their funds.
B)make any further adjustment for interest.
C)subtract from net income any earnings allocable to preferred stock equity usually the dividends on preferred stock declared during the period.
D)subtract dividends on common stock.
E)none of the above

Question

Quizplus · Accepted Answer

Dividends on common stock are not subtracted when calculating net income assignable to common shareholders' equity, as they are distributions of earnings rather than expenses.

To Calculate the Amount of Net Income Assignable to Common