Question

Elite Trailer Parks has an operating profit of $293,000. Interest expense for the year was $38,800; preferred dividends paid were $31,500; and common dividends paid were $36,900. The tax was $65,500. The firm has 20,200 shares of common stock outstanding. a. Calculate the earnings per share and the common dividends per share for Elite Trailer Parks. (Round your answers to 2 decimal places.)

Answer 1

Answer:

The earnings per share and the common dividends per share for Elite Trailer Parks is $7.78 and $1.82 respectively.

Explanation:

The computation is shown below:

Earning per share = (Net income) ÷ (Number of shares)

where,  

Net income = Operating profit - Interest expense - tax - preferred dividends

= $293,000 - $38,800 - $65,500 - $31,500

= $157,200

And, the number of shares are 20,200 shares

Now put these values to the above formula  

So, the value would equal to

= ($157,200) ÷ (20,200 shares)

= $7.78 per share

Common Dividend per share = (Common dividend) ÷ (number of shares)

= ($36,900) ÷ (20,200 shares)

= $1.82 per share