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Bubbles1999 Bubbles1999
wrote...
Posts: 319
5 years ago
Why does the numerator of the basic EPS formula subtract the amount of preferred dividends for some preferred shares and not for others?
Textbook 
Intermediate Accounting

Intermediate Accounting


Edition: 1st
Authors:
Read 32 times
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wrote...
5 years ago
 A more proper definition of EPS is earnings per common share. Preferred dividends for cumulative preferred shares will never be payable to common shareholders so they are always deducted from net income.  Preferred dividends for noncumulative preferred shares are deducted only when declared, because if not declared, the preferred shareholders lose their right to receive dividends for that year.
Bubbles1999 Author
wrote...
5 years ago
White Checkmark Going to mark this solved...
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