Preferred stock dividends declared

Dividends are a distribution of a portion of a company s earnings to its shareholders. Dividends are paid to preferred stockholders (preferred dividends) first, then to common stock holders. Management communicates to preferred stock holders with statements such as Preferred Stock Dividends Declared, that the company intends to pay them a certain amount of money for each preferred share they own. 

EPS = (Net income - Preferred stock dividends declared)/ Common shares outstanding... 

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