Question

Marx, Inc. has a net income of $600,000 for 2012, and there are 400,000 weighted-average shares of common stock outstanding. Dividends declared and paid during the year amounted to $80,000 on the preferred stock and $120,000 on the common stock. The earnings per share for 2012 is Group of answer choices

Answer 1

$1.3

Step-by-step explanation:

Net income = $600,000

Outstanding shares = 400,000

Dividends paid = $80,000

So, by using earning per share formula,

Earning per share = (Net income - Dividends paid) ÷ outstanding shares

By putting the value, we get

Earning per share = ($600,000 - $80,000) ÷ 400,000

= $520,000 ÷ 400,000

= $1.3

Hence, the earning per share for 2012 is $1.3.