Question

ABC Company had addition to retained earnings for the current fiscal year just ended of $395,000. The firm paid out $195,000 in cash dividend, and it has ending total equity of $5.3 million. The company currently has 170,000 shares of common stock outstanding. Please answer the following questions: a. What are earnings per share (E/PS)

Answer 1

$3.47

Step-by-step explanation:

According to the problem, computation of the given data are as follows,

Retained earning = $395,000

Cash dividend = $195,000

Outstanding shares = 170,000

So, by using earning per share formula,

Earning per share = (Retained earning + Cash dividend) ÷ Outstanding shares

By putting the value in the formula, we get

Earning per share = ( $395,000 + $195,000) ÷ 170,000

= $590,000 ÷ 170,000

= $3.47