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5) The numerator in calculating camnings per share is reduced for A) Cumulative preferred dividends ONLY if declared. B) Comm

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Answer #1

Earnings Per share = (Net Income - Preferred Dividends)/Outstanding Common Stock Shares

In this case, preferred dividends means , preferred dividends declared during that period. So Definitely these will be Non Cumulative preferred dividends that are declared.

Note that, Cumulative preferred dividends includes dividends to be paid for previous periods which are unpaid at that time.

So Option C is Correct Answer.

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