Calculating Earnings Per Share for Post-Retirement Benefits

Instructions:

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question 1 of 3

Which of the following is TRUE about diluted earnings per share?

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1. If the FHD Company made profits of $3,000,000 last year and had an average of 1,000,000 total shares, what is the basic earnings per share if the company paid out $250,000 in preferred stock dividends?

2. Which of the following is an example of a convertible security which accounts for diluted shares?

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About This Quiz & Worksheet

Gauge your understanding of calculating earnings per share for post-retirement benefits by accessing this worksheet and quiz. Topics you need to know for the quiz include convertible securities and the diluted earnings per share formula.

Quiz & Worksheet Goals

These topics are addressed on the quiz:

  • Calculating diluted earnings per share
  • Using earnings per share to evaluate an investment
  • Example(s) of a convertible security that accounts for diluted shares

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the lesson on computing earnings for post-retirement benefits
  • Information recall - access the knowledge you have gained about calculating the basic earnings per share
  • Knowledge application - use your knowledge to answer questions about using the diluted earnings per share formula

Additional Learning

Progress through the lesson called Calculating Earnings Per Share for Post-Retirement Benefits so you can:

  • Compare and contrast preferred stock and common stock
  • Determine what the basic earnings per share assumes
  • See how the EPS can be used
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