Which of the following does not represent potential shares for an EPS calculation?
A) Convertible preferred stock.
B) Convertible bonds.
C) Stock rights.
D) Participating preferred stock.

Question

Quizplus · Accepted Answer

Participating preferred stock is a type of preferred stock that allows shareholders to receive additional dividends in addition to their fixed dividend if the company meets certain financial targets or earns excess profits. This additional dividend is not factored into the EPS calculation, as it is not a potential share of common stock. A, B, and C are all potential shares for an EPS calculation as they have the ability to be converted into common stock.

Which of the Following Does Not Represent Potential Shares for an EPS