Question

Delaware Trust has 450 shares of common stock outstanding at a market price per share of $27. Currently, the firm has excess cash of $400, total assets of $28,900, and net income of $1,320. The firm has decided to pay out all of its excess cash as a cash dividend. What will the earnings per share be after this dividend is paid? A. $2.69 B. $2.86 C. $2.93 D. $3.07 E. $3.24

Answer 1

Earnings per share is $2.93

Explanation:

Given data

shares = 450

assets = $28,900

net income = $1,320

to find out

earnings per share

solution

Earnings per share is directly calculate by net income / total share

here we know net income and that share i.e.450

so

Earnings per share = net income / total share

Earnings per share = 1,320 / 450

Earnings per share = $2.93

so option C is right i.e. $2.93