Which of the following depicts earnings per share?
A)Net income ÷ number of common shares
B)Net income ÷ weighted average number of common shares
C)Net income - preferred dividend) ÷ weighted average number of common shares
D)Net income - preferred dividend) ÷ number of common shares

Question

Quizplus · Accepted Answer

Earnings per share (EPS) is calculated by subtracting preferred dividends from net income and then dividing by the weighted average number of common shares outstanding during the period. This accounts for any changes in the share count over the period.

Which of the Following Depicts Earnings Per Share