Which amount should then be added as an adjustment

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Problem 1: In calculating diluted earnings per share, the equivalent number of convertible preferred shares are added as an adjustment to the denominator. If the preferred shares are cumulative, which amount should then be added as an adjustment to the numerator? Which of the following results in increasing basic earnings per share?

Select one:

a. Annual preferred dividend.

b. Annual preferred dividend times (one minus the income tax rate).

c. Annual preferred dividend times the income tax rate.

d. Annual preferred dividend divided by the income tax rate.

e. All arrears of preferred dividends due upto the current year.

 

Reference no: EM132972168

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