Answer:
$1.28
Explanation:
The computation of the earning per share is shown below:
As we know that
Earning per share = Net income ÷ Number of shares outstanding
where,
Net income is
Earning before interest and taxes $24,600
Less: Interest
($60,000 × 6%) - $3,600
Income before tax $21,000
Less: tax for 40% - $8,400
Earning after tax $12,600
Less: Preference dividend
(1,500 shares × $5) -$7,500
Income available $5,100
So the earning per share is
= $5,100 ÷ $4,000
= $1.28