Question: In computing earnings per share for a simple capital structure, if the preferred stock is cumulative, the amount that should be deducted as an adjustment
In computing earnings per share for a simple capital structure, if the preferred stock is cumulative, the amount that should be deducted as an adjustment to the numerator (earnings) is the
a. preferred dividends in arrears times (one minus the income tax rate).
b. annual preferred dividend times (one minus the income tax rate).
c. preferred dividends in arrears.
d. annual preferred dividend.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
