Question

Earnings per share, EPS, is calculated using the formula EPS = NI-PD/SO, where NI is net income, PD is preferred dividends, and SO is the average number of outstanding shares. Rearrange the formula to solve for the net income (NI)

Answer 1

NI = EPS(SO) + PD

$160000

Explanation:

Multiply SO to both sides and add PD to both sides to isolate NI,

Substitute to get the cost in dollars.

Answer 2

EPS = NI-PD/SO⇒ EPS + PD/ SO = NI, of this form you rearrange NI, NI= EPS+PD/SO