What does the term "basic earnings per share" specifically refer to?

Basic earnings per share (EPS) is a straightforward financial metric that reflects a company's profitability on a per-share basis for its common stock. The correct definition refers to net income after deducting preferred dividends (if applicable) as a crucial step to ensure that the earnings attributed to common shareholders are accurately represented. This figure is then divided by the weighted average number of common shares outstanding during the period, which gives investors a clear sense of how much profit is assigned to each share of common stock.

This measure is essential because it allows investors to assess the company's performance and profitability relative to their ownership stake. Since preferred dividends must be paid before common shareholders receive any earnings, excluding them provides the genuine earnings available for distribution among common stockholders. Therefore, the correct answer captures the essential elements of calculating basic earnings per share accurately, making it the precise definition the question seeks.