Answer:
The company's earnings per share on common stock is $7.50
Explanation:
Given data
Net income N = $160,000
Preferred dividends D = $10,000
common stock outstanding C = 20,000
Market price P = $35 / share
to find out
earnings per share on common stock is
solution
we will find earning per share that is given by
Earnings per share = (net income - preferred dividend ) / common stock outstanding
so now put all these value in this equation we get
Earnings per share = ( 160,000 - 10,000 ) / 20,000
Earnings per share = ( 150,000 ) / 20,000
Earnings per share = 7.5
so The company's earnings per share on common stock is $7.50
