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Basic Question 4 of 40
To determine the earnings per share, ______ should be divided by the average number of common shares outstanding?
B. net income - preferred dividends
C. current market price of the stock
A. net income + interest expense
B. net income - preferred dividends
C. current market price of the stock
User Contributed Comments 1
| User | Comment |
|---|---|
| poomie83 | It cannot be A because the denominator would need to include the shares from convertible bonds. Also interest expense should be the after tax amount |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
describe how earnings per share is calculated and calculate and interpret a company's basic and diluted earnings per share for companies with simple and complex capital structures including those with antidilutive securities
CFA® 2024 Level I Curriculum, Volume 2, Module 2.