CFA Practice Question

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CFA Practice Question

The earnings per share figure based on income before extraordinary items ______
A. applies to all types of stock issued by a corporation-common as well as preferred.
B. is the amount used in computing the P/E ratio for a corporation's common stock.
C. is always higher than the earnings per share figure based on net income.

User Contributed Comments 5

User Comment
murli EPS based on income from continuing operations is the basic EPS that is used for PE ratio. Diluted EPS is proforma.
americade Is the EPS from continuing ops the same as EPS before extraordinary items (if there are no acctg changes and discontinued?)
If not, which is it, EPS from Continuing Ops as you said, or, EPS before Extraordinary items?
samsonovk is not income before extraodinary items higher than ni? thus c should be right
charliedba no samsonovk. The extraordinary items can have positive/negative impact on earnings.
meeravenk Beware of the word 'always'. Think about exceptions.
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