Question

McDonnell-Myer Corporation reported net income of $741 million. The company had 544 million common shares outstanding at January 1 and sold 36 million shares on Feb. 28. As part of an annual share repurchase plan, 6 million shares were retired on April 30 for $47 per share. Calculate McDonnell-Myer's earnings per share for the year.

Answer 1

McDonnell-Myer's earnings per share for the year is $1.3

Step-by-step explanation:

Given data

net income = $741 million

common shares = 544 million

sold share = 36 million

shares were retired = 6 million

per share = $47

to find out

McDonnell-Myer's earnings per share for the year

solution

we know common shares outstanding at 1 January = 544 million

so we say share sold 28 feb = 36 million that mean = 36 × (10/12) = 30

and share repurchased 30 April = 6 million that mean = 6 × (8 /12) = 4

so total no of share outstanding at end of year = 544 + 30 - 4 = 570 million

so

earning per share = net earning / no of share

earning per share = 741 / 570

earning per share = $ 1.3

McDonnell-Myer's earnings per share for the year is $1.3