Earnings per share is calculated by:
A) dividing the number of shares outstanding by net income of the firm.
B) multiplying the net income of the firm by the preferred dividends and dividing it by the total capital invested by the owners.
C) dividing net income of the firm minus preferred dividends by the average number of shares of common stock outstanding.
D) dividing the number of shares outstanding by the value of owner's equity

Question

Quizplus · Accepted Answer

Earnings per share is calculated by dividing net income of the firm minus preferred dividends by the average number of shares of common stock outstanding. This gives a measure of how much profit is earned by each share of common stock.

Earnings Per Share Is Calculated By