In determining basic earnings per share, the annual dividend on convertible cumulative preferred shares, which are not a dilutive convertible security, should be:

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In calculating basic earnings per share (EPS), the annual dividend on convertible cumulative preferred shares should be deducted from net income whether declared or not. This is because these dividends represent a share of earnings that is not available to common shareholders, regardless of whether the dividends are actually declared.

In Determining Basic Earnings Per Share, the Annual Dividend on Convertible