Question

Blossom Corporation had 2025 net income of $1,107,000. During 2025, Blossom paid a dividend of $2 per share on 205,100 shares of preferred stock. During 2025, Blossom had outstanding 268,000 shares of common stock. Compute Blossom's 2025 earnings per share. (Round answer to 2 decimal places, eg. 3.56) Earnings per share per share

Answer 1

To calculate Blossom Corporation's 2025 earnings per share, divide the net income by the total number of outstanding shares. Blossom Corporation's 2025 earnings per share is $2.60.

Step-by-step explanation:

To calculate Blossom Corporation's 2025 earnings per share, we need to divide the net income by the total number of outstanding shares.

Net income: $1,107,000
Preferred stock dividend: $2 per share on 205,100 shares
Common stock outstanding: 268,000 shares

First, we subtract the dividend amount from the net income:
Net income - Preferred stock dividend = $1,107,000 - ($2 x 205,100) = $1,107,000 - $410,200 = $696,800

Next, we divide the adjusted net income by the number of common stock shares:
Earnings per share = Adjusted net income / Number of common stock shares = $696,800 / 268,000 = $2.60

Therefore, Blossom Corporation's 2025 earnings per share is $2.60.