The correct answer is:

b. Ordinary shareholders

Here's why:

Earnings Per Share (EPS) is a financial metric that indicates a company's profitability by dividing net income by the total number of outstanding ordinary shares.

Step 1: Identify the net income or net profit for the period. This is the amount of money the company has earned after subtracting all its expenses, including taxes and costs.

Step 2: Identify the number of outstanding ordinary shares. These are the shares that have been issued and are in the hands of shareholders.

Step 3: Divide the net income by the number of outstanding ordinary shares.

Secured creditors (option a), debenture holders (option c), and preferred shareholders (option d) are not used in the calculation of basic EPS. The focus is on ordinary shareholders because they are the ones who bear the highest risk; if a company goes bankrupt, they are the last to be paid, after creditors and preferred shareholders. Therefore, EPS gives ordinary shareholders an idea of their portion of the company's profits.

Question

The correct answer is:

b. Ordinary shareholders

Here's why:

Earnings Per Share (EPS) is a financial metric that indicates a company's profitability by dividing net income by the total number of outstanding ordinary shares.

Step 1: Identify the net income or net profit for the period. This is the amount of money the company has earned after subtracting all its expenses, including taxes and costs.

Step 2: Identify the number of outstanding ordinary shares. These are the shares that have been issued and are in the hands of shareholders.

Step 3: Divide the net income by the number of outstanding ordinary shares.

Secured creditors (option a), debenture holders (option c), and preferred shareholders (option d) are not used in the calculation of basic EPS. The focus is on ordinary shareholders because they are the ones who bear the highest risk; if a company goes bankrupt, they are the last to be paid, after creditors and preferred shareholders. Therefore, EPS gives ordinary shareholders an idea of their portion of the company's profits.

Knowee AI · Accepted Answer

The correct answer is:

b. Ordinary shareholders

Here's why:

Earnings Per Share (EPS) is a financial metric that indicates a company's profitability by dividing net income by the total number of outstanding ordinary shares.

Step 1: Identify the net income or net profit for the period. This is the amount of money the company has earned after subtracting all its expenses, including taxes and costs.

Step 2: Identify the number of outstanding ordinary shares. These are the shares that have been issued and are in the hands of shareholders.

Step 3: Divide the net income by the number of outstanding ordinary shares.

Secured creditors (option a), debenture holders (option c), and preferred shareholders (option d) are not used in the calculation of basic EPS. The focus is on ordinary shareholders because they are the ones who bear the highest risk; if a company goes bankrupt, they are the last to be paid, after creditors and preferred shareholders. Therefore, EPS gives ordinary shareholders an idea of their portion of the company's profits.

Basic EPS is calculated using the net profit of loss for the period attributable to… Question 9Select one: a. Secured creditors b. Ordinary shareholders c. Debenture holders d. Preferred shareholders

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