Asked by Marisa Tavarez on Jun 18, 2024
Verified
Both common and preferred stock dividends are subtracted in arriving at net income available to common stockholders.
Preferred Stock Dividends
Dividends paid on preferred shares of a company which typically have a fixed dividend rate and priority over common stock in dividend payments.
Net Income
The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.
- Understand the importance of information found in financial statements for evaluating a company's economic operations and status.
Verified Answer
KS
Kulwinder SanghaJun 20, 2024
Final Answer :
False
Explanation :
Net income available to common stockholders is calculated by subtracting preferred stock dividends from net income, but common stock dividends are not subtracted in this calculation.
Learning Objectives
- Understand the importance of information found in financial statements for evaluating a company's economic operations and status.
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