B is corrent. Annual net earnings available to common stockholders (e.g., the numerator in EPS calculations) are reduced by both bond interest and preferred dividends. The interest reduces income in the income statement (and also reduces tax expense). The preferred dividends are subtracted from net income in computing net earnings available to common stockholders.
A is incorrect. Annual net earnings available to common stockholders (e.g., the numerator in EPS calculations) are reduced by both bond interest and preferred dividends. The interest reduces income in the income statement (and also reduces tax expense). The preferred dividends are subtracted from net income in computing net earnings available to common stockholders.
A is incorrect. Annual net earnings available to common stockholders (e.g., the numerator in EPS calculations) are reduced by both bond interest and preferred dividends. The interest reduces income in the income statement (and also reduces tax expense). The preferred dividends are subtracted from net income in computing net earnings available to common stockholders.
D is incorrect. Annual net earnings available to common stockholders (e.g., the numerator in EPS calculations) are reduced by both bond interest and preferred dividends. The interest reduces income in the income statement (and also reduces tax expense). The preferred dividends are subtracted from net income in computing net earnings available to common stockholders.
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