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Question(s) / Instruction(s):

A corporation has net income of $200,000 for the current year. The corporation has 5,000 shares of cumulative, 5%, $100 preferred stock and 20,000 shares of $20 par common stock outstanding for all of the year. What is the denominator to be used in the earnings per share calculation?  

a)            The denominator is 25,000 shares.  

b)            The denominator is 5,000 shares.  

c)            The denominator is 10,000 shares.  

d)            The denominator is 20,000 shares.  

 

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