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5 July, 19:51

Basic earnings per share is computed using:A. The actual number of common shares outstanding at the end of the year. B. A weighted-average of preferred and common shares. C. The number of common shares outstanding plus common stock equivalents. D. Weighted-average common shares outstanding for the year.

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  1. 5 July, 20:42
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    D. Weighted-average common shares outstanding for the year.

    Explanation:

    The formula to compute the earning per share is shown below:

    Earning per share = (Net income - preference dividend) : (Weighted-average common shares outstanding for the year)

    Weighted average is come after considering the beginning year shares and ending year shares and then divide it by 2

    By using this formula, the correct earning per share can come.

    Hence, all other options are wrong except d.
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Home » Business » Basic earnings per share is computed using:A. The actual number of common shares outstanding at the end of the year. B. A weighted-average of preferred and common shares. C. The number of common shares outstanding plus common stock equivalents. D.
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