Question

Elite Trailer Parks has an operating profit of $225,000. Interest expense for the year was $35,200; preferred dividends paid were $30,700; and common dividends paid were $36,600. The tax was $64,600. The firm has 20,100 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:

Earnings per share (EPS) = $4.70 per share

Dividend per share  (DPS)= $1.82 per share

Explanation:

                                               Elite Trailer Parks

                                           Income statement

                                                       $

Operating Profit                       225,000.00

less interest expense              (35,200.00)

Profit before Tax                        189,800.00

Less Tax                                        64,600.00)

Profit after tax                       125,200.00

Preferred dividends                (30,700.00)

Earnings to common stock         94,500.00

Dividend to Common stock           36,600.00

Earnings per share (EPS)

Earnings per share (EPS) = Earnings available to ordinary shareholders /unit of shares

=$94,500.00/20,100 units

= $4.70 per share

Dividend per share  (DPS)

= Total dividend to common stock/ units of shares

=36,600.00/ 20,100 units

=$1.82 per share

Earnings per share(EPS) = $4.70 per share

Dividend per share  (DPS)= $1.82 per share