The basic earnings per share ratio does not take stock options, warrants, and preferred stock into account.

Name: The basic earnings per share ratio does not take stock options, warrants, and preferred stock into account.
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Question

Quizplus · Accepted Answer

The basic earnings per share ratio only considers the number of common shares outstanding, while options, warrants, and preferred stock can all impact the number of shares outstanding and therefore affect the calculation of earnings per share.

The Basic Earnings Per Share Ratio Does Not Take Stock