Which of the following statements about earnings per share (EPS)is NOT true?
A) Accounting standards require it to be disclosed in every set of accounts.
B) EPS is calculated as: (net operating profit - dividends on preference shares)/ (weighted average number of ordinary shares outstanding).
C) EPS relates the accounting earnings and market price of the shares.
D) The ratio can be difficult to calculate for consolidated companies.

Question

Quizplus · Accepted Answer

EPS does not directly relate accounting earnings to the market price of shares; it measures the portion of a company's profit allocated to each outstanding share of common stock.

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