Nonconvertible, cumulative, preferred shares affect the computation of EPS (for a simple capital structure), basic EPS, but not diluted EPS.

Question

Quizplus · Accepted Answer

Nonconvertible, cumulative, preferred dividends must be subtracted from net income in the computation of both basic and diluted EPS, as they do not convert into common shares and thus do not affect the dilution calculation.

Nonconvertible, Cumulative, Preferred Shares Affect the Computation of EPS (For