Question

In 2020, Wildhorse Corporation reported net income of $1,021,600. It declared and paid preferred stock dividends of $265,100. During 2020, Wildhorse had a weighted average of 199,600 common shares outstanding. Compute Wildhorse’s 2020 earnings per share._________

Answer 1

Wildhorse’s 2020 earnings per share is $3.79

Step-by-step explanation:

The computation of the earning per share is shown below:

Earning per share = (Net income - preference dividend) ÷ (Average weighted of common outstanding shares)

where,

Net income and the preference dividend is $1,021,600 and $265,100

And, the number of shares are 199,600 shares

Now put these values to the above formula

So, the value would equal to

= ( $1,021,600 - $265,100) ÷ (199,600 shares)

= $3.79 per share