Asked by
nayara munoz
on Nov 18, 2024Verified
If a company has issued only one class of stock, the earnings per share are determined by dividing net income plus interest expense by the number of shares outstanding.
Earnings Per Share
A financial metric that measures the profitability of a company on a per-share basis, calculated by dividing the company's net income by the number of outstanding shares.
Net Income
The total profit of a company after all expenses and taxes have been subtracted from total revenue, often referred to as the bottom line.
Interest Expense
The cost incurred by an entity for borrowed funds, often represented as an annual percentage rate of the principal.
- Recognize the importance and limitations of earnings per share (EPS) as an indicator of company performance.
Verified Answer
SR
Learning Objectives
- Recognize the importance and limitations of earnings per share (EPS) as an indicator of company performance.