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Serggg [28]
3 years ago
8

Computing Earnings per Share Lee Corp. had 200,000 weighted average common shares outstanding in 2020 and 5,000 weighted average

preferred shares outstanding in 2020. Lee Corp. reported net income of $450,000 in 2020, and declared and paid $50,000 and $10,000 of common stock and preferred stock dividends, respectively. Compute earnings per share for Lee Corp. for 2020.
Business
1 answer:
Gala2k [10]3 years ago
6 0

Answer:

$2.20 per stock

Explanation:

Earnings per share (EPS) = (net income - preferred dividends) / weighted average stocks outstanding

  • net income = $450,000
  • weighted average stocks outstanding = 200,000
  • preferred stock dividends = $10,000

earnings per share = ($450,000 - $10,000) / 200,000 = $440,000 / 200,000 = $2.20 per stock

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