In order to calculate EPS, Profit after Tax and Preference Dividend is divided by ________________.

m< of Equity Shares

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Number of Equity Shares

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Face Value of Equity Shares

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None of the above

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Solution

The correct option is B Number of Equity Shares
Earning per share (EPS) is a very important measure which indicates the profitability of the organization in terms of outstanding shares on a particular date. Term EPS is very much important for the shareholders and the people who deals in stock. The higher is the EPS , more is the profitability of the company.
It is calculated by :
EPS= Net profit after tax and preference dividend / Number of equity shares.

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