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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 am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
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® 2025 Level I Curriculum, Volume 2, Module 2.