Question

When a company has cumulative preferred stock outstanding, the preferred dividend is subtracted from net income in the earnings per share calculation whether the dividend has been declared or not.

A)True
B)False

Answer 1

When a company has cumulative preferred stock outstanding, the preferred dividend is subtracted from net income in the earnings per share calculation whether the dividend has been declared or not.

Step-by-step explanation:

The statement is True. When a company has cumulative preferred stock outstanding, the preferred dividend is subtracted from net income in the earnings per share calculation whether the dividend has been declared or not.