In computing basic earnings per share (EPS), the amount of preference dividends on noncumulative preference shares should be: A. deducted from net income whether declared or not B. deducted from net income only when declared C. added to net income only when declared D. ignored

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.