Question

In 2020, Lindon Corp. reported a discontinued operations loss of $1,300,000, net of tax. It declared and paid preferred stock dividends of $370,000 and common stock dividends of $590,000. During 2020, Lindon had a weighted average of 600,000 common shares outstanding.

As a result of the discontinued operations loss, net of tax, the earnings per share would decrease by _______.

Answer 1

The earnings per share would drop by -$2.17 per share

Step-by-step explanation:

Firstly the EPS =LOSS/TOTAL SHAREHOLDING

In this ,=-$1300000/600000shares

In other words the EPS for the previous year when compared to the current would see a drop in value per unit of share of $2.17