Question

On December 31, Sulfur Corporation has the following data available: Net Income $140,000 Market price of one share of common stock $5 Preferred dividends 36,000 Weighted-average number of shares of common stock outstanding 20,000 shares Total common stockholders' equity at the beginning of the year 360,000 Total common stockholders' equity at the end of the year 160,000 What is the earnings per share?

Answer 1

Answer:

Earnings per share

= Net income - Preferred dividend

  No of common stocks outstanding at the end

= $140,000  - $36,000

         160,000

= $0.65 per share

Explanation:

Earnings per share is the ratio of profit available for distribution to common stock holders to number of common stocks outstanding. Profit available for distribution to common stock holders is the diffrence between net income and preferred dividend.