Question

Botanical Gardens Nursery has 6,800 shares of stock outstanding at a market price of $21 a share. The earnings per share are $1.54. The firm has total assets of $315,000 and total liabilities of $186,000. Today, the firm is paying an annual cash dividend of $0.82 a share. Ignore taxes. What will the earnings per share be after the dividend is paid?a. $0.31b. $0.74c. $1.54d. $20.70e. $21.02

Answer 1

Answer:

Earnings Per Share will be still $1.54.

Explanation:

According to the following formula, we get:

Earnings per share = Earnings available/Number of shares

Earnings Per Share does not change with payment of dividends. Hence, EPS will be still $1.54.