ABC declared and paid cash dividends in January of the current year to its common shareholders. The dividend:
A)Will be added to the numerator of the earnings per share fraction for the current year.
B)Will be added to the denominator of the earnings per share fraction for the current year.
C)Will be subtracted from the numerator of the earnings per share fraction for the current year.
D)Has no effect on the earnings per share for the coming year.

Question

Quizplus · Accepted Answer

Dividends paid do not affect the calculation of earnings per share (EPS) as they are not part of net income. EPS is calculated using net income, not dividends.

ABC Declared and Paid Cash Dividends in January of the Current