Question

Cullumber Corporation had 2020 net income of $1,098,000. During 2020, Cullumber paid a dividend of $2 per share on 265,500 shares of preferred stock. During 2020, Cullumber had outstanding 189,000 shares of common stock. Compute Cullumber’s 2020 earnings per share. (Round answer to 2 decimal places, e.g. 3.56.) Earnings per share

Answer 1

Answer:

EPS=$3

Explanation:

Net income =1,098,000

Dividend on preferred stock=2*265,500=$531,000

Outstanding shares=189,000

EPS= (Net income-preferred dividends)/Weighted Average share outstanding

EPS=($1,098,000-$531,000)/189,000

EPS=$3