TRUE OR FALSE

1. Net income is $100,000. The opening number of shares for the year is 50,000 shares. The weighted number of shares outstanding for the year is 53,500 shares. The EPS is $2.00 per share.
2. When calculating basic EPS. If preferred shares are cumulative, deduct the dividend amount from net income according to the preferred share's entitlement.
3. When calculating the weighted average common shares outstanding; if stock dividends or stock splits occur, the number of shares outstanding must be restated on a retroactive basis as though the stock dividend or split had occurred at the end of the year.