Question

If abc company earned $280,000 in net income and paid cash dividends of $40,000, what are abc's earnings per share if it has 80,000 shares outstanding?

Answer 1

To find earnings per share, simply divide the company's net income by the number of shares that are outstanding. In this case, the values are $280,000/80,000. This gives a value of $3.50 for the earnings per share outstanding. Dividends, in this case, are not necessary for the calculation.