Question

A company reports the following: Net income $595,900 Preferred dividends $44,140 Shares of common stock outstanding 44,000 Market price per share of common stock $36.37 Calculate the company's earnings per share on common stock. Round your answer to the nearest cent.

Answer 1

$12.54

Step-by-step explanation:

The computation of the earning per share is shown below:

Earnings per share = (Net Income - Preferred Dividend) ÷ (Share of common stock outstanding )

= ($595,900 - $44,140) ÷ (44,000 common stock outstanding shares )

= $551,760 ÷ 44,000 common stock outstanding shares

= $7.5

= $12.54

Hence, the earning per share is $12.54