Number of shares outstanding if it is divided by net income for using to calculate___________?
Correct answer: A. Earning per share
- A. Earning per share
- B. Dividends per share
- C. Book value of share
- D. Market value of shares
Explanation
Earnings per share is calculated by dividing net income available to common shareholders by the number of shares outstanding. The wording reverses the usual formula, but option a clearly identifies the intended measure.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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