Question

Salt Company reports net income of $360 million for 2017; the company's tax rate is 40%. At the beginning of the year, 200 million common shares were outstanding. On July 1, Salt sells an additional 80 million shares. The company's basic EPS will be _________.

Answer 1

Earning per share = $1.8 $ per share

Step-by-step explanation:

Given:

Net income = $360 million

Common shares outstanding = 200 million

Company's tax rate = 40%

Earning per share = ?

Computation of Earning per share:

Earning per share = Net income / Common shares outstanding

Earning per share = $360 million / $200 million

Earning per share = $1.8 $ per share

Note: Company's tax rate is used to calculate net income from gross income