Question

Calculation of EPS and retained earnings Everdeen Mining​, ​Inc., ended 2019 with net profits before taxes of $ 436 comma 000. The company is subject to a 21 % tax rate and must pay $ 64 comma 000 in preferred stock dividends before distributing any earnings on the 170 comma 000 shares of common stock currently outstanding. a. Calculate​ Everdeen's 2019 earnings per share​ (EPS). b. If the firm paid common stock dividends of $ 0.80 per​ share, how many dollars would go to retained​ earnings?

Answer 1

A) $ 1,65 are the 2019 EPS

B) $ 144.4400 go to retained earning after paid dividens of 0,80 per share.

Please see details below:

Step-by-step explanation:

Net Income BEFORE Taxes $436.000

Tax RATE 21% -$91.560

Net Income after Taxes $344.440

Preferred Stock -$64.000

Subtotal $ 280.440 >> 280.440/170.000= $1,65 2019 EPS

Dividends $0,80/Shares: 170.000*0,8= $136.000

Subtotal $ 144.440 >> Retained Earnings