Which of the following is the formula for computing earnings per share of common stock?
A)(Net income + interest expense)/ average total assets
B)Net income/net sales
C)(Net income - preferred dividends)/ number of shares of outstanding common stock
D)(Net income - preferred dividends)/ average common stockholders' equity

Question

Quizplus · Accepted Answer

Earnings per share of common stock is calculated by dividing the net income available to common stockholders by the number of outstanding shares of common stock. The formula for computing earnings per share of common stock is (Net income - preferred dividends)/ number of shares of outstanding common stock.

Which of the Following Is the Formula for Computing Earnings