We can actually deduce here that the denominator in the earnings per share formula is: A. preferred dividends
Earnings per share (EPS) is actually known as the calculation that is done in order to calculate a company's profit.
In other words, it is calculated as company's profit divided by the outstanding shares of its common stock.
We can actually deduce here that the result of the calculation tells us or gives us an indication of how the company's profit look like. It is the indicator for a company's profitability.
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