Question

Oriole Company had 302000 shares of common stock issued and outstanding at December 31, 2020. During 2021, no additional common stock was issued. On January 1, 2021, Oriole issued 404000 shares of nonconvertible preferred stock. During 2021, Oriole declared and paid $171000 cash dividends on the common stock and $155000 on the nonconvertible preferred stock. Net income for the year ended December 31, 2021, was $964000. What should be Oriole's 2021 earnings per common share, rounded to the nearest penny

Answer 1

Answer: $2.68

Step-by-step explanation:

Oriole's 2021 earnings per common share would be calculated by using the formula:

​​​​= (Net income - preference dividend) / outstanding common stock

= ($964000 - $155000) / 302000

= $809000 / 302000

= $2.68 per common share