Question

On January 30, 2019, prior to the issuance of its financial statements for the year ended December 31, 2018, Crane declared a 100% stock dividend on its common stock. Net income for 2018 was $1130000. In its 2018 financial statements, Crane's 2018 earnings per common share should be: (rounded to the nearest penny)

Answer 1

Answer:

See below.

Explanation:

Assuming an initial outstanding common shares of 100,000

100% stock dividend means that another 100,000 shares have been issued,

Total outstanding shares then are = 100,000+100,000 = 200,000

Earnings per share = Net Income / Total shares

EPS = 1,130,000 / 200,000

EPS = $5.65/share

You can compute this by inputting any number of shares and increasing the total number by a 100%.

Hope that helps.