When computing diluted earnings per share, which of the following will not be considered in the calculation?
A) Dividends paid on common stock.
B) The weighted average common shares.
C) The effect of stock splits.
D) The number of common shares represented by stock purchase warrants.

Question

Quizplus · Accepted Answer

Dividends paid on common stock are not considered in the calculation of diluted earnings per share, as they are a distribution of profits rather than an indicator of the company's earnings potential. The weighted average common shares, the effect of stock splits, and the number of common shares represented by stock purchase warrants are all considered in the calculation of diluted earnings per share.

When Computing Diluted Earnings Per Share, Which of the Following