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Earnings per share (EPS) equals ______ divided by the average shares of common stock outstanding. (Assume no preferred stock has been issued.) Multiple choice question. Revenue Operating Income Retained Earnings Net Income

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Anthougoidn

With the issuance of preferred stock, Earnings per share (EPS) equal D. Net Income divided by the average shares of common stock outstanding.

If the company issues preferred stock, the preferred dividend is deducted from the net income before the computation of the EPS. In such a situation, the Earnings per share becomes the Net Income after the deduction of preferred dividend divided by the average common shares outstanding.

Thus, the Earnings per share without preferred dividend equals D.

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