Question

Suppose the following information (in millions of dollars) is available for Limited Brands for a recent year: Sales revenue $9,060 Net income $213, Preferred dividend $0, and Weighted-average common shares outstanding 300 million.

Compute the earnings per share for Limited Brands.
Earnings per share $ = ?

Answer 1

The earnings per share (EPS) for Limited Brands is calculated by dividing the net income, which is $213 million, by the weighted-average common shares outstanding, which is 300 million. The EPS is $0.71 per share.

Step-by-step explanation:

To calculate the earnings per share (EPS) for Limited Brands, use the following formula:

Earnings Per Share (EPS) = (Net Income - Preferred Dividends) / Weighted-Average Common Shares Outstanding

From the information provided:

• Sales Revenue: $9,060 million (not directly relevant to the EPS calculation)
• Net Income: $213 million
• Preferred Dividends: $0 million (no adjustment necessary)
• Weighted-Average Common Shares Outstanding: 300 million shares

Substitute the values into the EPS formula:

EPS = ($213 million - $0 million) / 300 million shares

EPS = $213 million / 300 million shares

EPS = $0.71 per share

Therefore, the earnings per share for Limited Brands is $0.71.