The ratio that uses the weighted average number of common shares in the denominator is the
A) price earnings ratio.
B) return on equity.
C) earnings per share.
D) payout ratio.

Question

Quizplus · Accepted Answer

Earnings per share (EPS) uses the weighted average number of common shares in the denominator. It is calculated by dividing the net income available to common shareholders by the weighted average number of common shares outstanding during the period.

The Ratio That Uses the Weighted Average Number of Common