Earnings per share (EPS) is calculated as:

A Total revenue per share

B Net income minus preferred dividends divided by weighted average common shares outstanding

C Gross profit per share

D Total assets per share

✓ Correct Answer: Option B

Basic EPS = (Net Income - Preferred Dividends) / Weighted Average Common Shares. Diluted EPS includes potential dilutive securities (options, convertibles).

💡 Why is B) the correct answer?

The correct answer to the question "Earnings per share (EPS) is calculated as:" is Option B: Net income minus preferred dividends divided by weighted average common shares outstanding.

The other options — A) Total revenue per share, C) Gross profit per share, D) Total assets per share — are incorrect for this Pre-MBA Exam Prep question. As explained above: Basic EPS = (Net Income - Preferred Dividends) / Weighted Average Common Shares. Diluted EPS includes potential dilutive securities (options, convertibles).

📚 About This Pre-MBA Exam Prep Practice Question

This 2-level Pre-MBA Exam Prep question from the Accounting topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free Pre-MBA Exam Prep practice test or use flashcards for spaced repetition review.

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Earnings per share (EPS) is calculated as:

✓ Correct Answer: Option B

📚 About This Pre-MBA Exam Prep Practice Question

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