Question

Marigold Corp. had 302000 shares of common stock issued and outstanding at December 31, 2017. No common stock was issued during 2018. On January 1, 2018, Marigold issued 202000 shares of nonconvertible preferred stock. During 2018, Marigold declared and paid $105000 cash dividends on the common stock and $83000 on the preferred stock. Net income for the year ended December 31, 2018 was $626000. What should be Marigold's 2018 earnings per common share? (rounded to the nearest penny)

Answer 1

EPS = 1.077

Step-by-step explanation:

302,000 shares at december 31th, 2017

202,000 issued

504,000 total

(net income - preferred stock dividends) / common stock

(626,000-83,000 ) / 504,000 = EPS = 1.077380952 = 1.077