Question

In 2017, Moreno Cheeses had a net income of $42,390, paid preferred dividends of $6,000 and 18,000 shares of common stock outstanding. What was their earnings per share for 2017?a) $1.69 b) $2.69 c) $2.02 d) $2.36

Answer 1

Answer:

Option c.

Step-by-step explanation:

In 2017, Moreno Cheeses had a net income of $42,390, paid preferred dividends of $6,000.

value of the shares = Net income - preferred dividends

                                = 42,390 - 6,000

                                = $36,390

To find their earnings per share = $\frac{\text{Value of the shares}}{\text{total number of shares}}$

= $\frac{36,390}{1,8000}$

= $2.02 per share

Option c) $2.02 per share