Question

Mayan company had net income of $33,480. the weighted-average common shares outstanding were 9,300. the company has no preferred stock. the company sold 4,300 shares before the end of the year. there were no other stock transactions. the company's earnings per share is:

Answer 1

Answer:

Earnings Per Share = $3.6

Explanation:

Given

Net Income Average = $33,480

Weighted-average common shares outstanding = 9,300

Shares sold = 4,300

Required

Calculate the company's earnings per share.

Earning per share is calculated as thus;

Let N represent the Net Income; P represent the Preferred Dividend and W represent the Weighted-average common shares outstanding

$Earnings Per Share = \frac{N - P}{W}$

The question says there was no preferred stock;

So, P= 0

Substitute $33,480 for N and 9,300 for W.

The formula becomes;

$Earnings Per Share = \frac{33,480 - 0}{9300}$

$Earnings Per Share = \frac{33,480}{9300}$

$Earnings Per Share = 3.6$

Hence, the calculated Earnings per share of Mayan company is $3.6