Which of the following statements about earnings per share (EPS)is correct?
A)Increased net income would cause earnings per share to decrease.
B)Issuance of more common shares would cause earnings per share to increase.
C)Purchasing treasury shares would cause earnings per share to decrease.
D)EPS is calculated using the weighted average number of common shares of stock outstanding

Question

Quizplus · Accepted Answer

EPS is calculated by dividing net income by the weighted average number of common shares of stock outstanding during the period. A higher net income would increase EPS, whereas issuing more common shares or purchasing treasury shares would decrease EPS.

Which of the Following Statements About Earnings Per Share (EPS)is