Question

At December 31, 2018 and 2019, Frist Company had outstanding 50 million common shares and 4 million shares of 10%, $10 par cumulative preferred stock. Net income for 2019 was $20 million. No dividends were declared in 2018 or 2019. EPS for 2019 was:

Answer 1

Answer:

The EPS for 2019 was $0.32

Explanation:

A                           Net Income                                 $20,000,000

B            No. of preferred Stock shares                  $4,000,000

C                     Par value per share                          $10.00

D = C*10%     Dividend per share (10%)                   $1.00

E = B*D           Preferred Dividend                          $4,000,000.00

F = A - E     Net Income(Common Stockholders)    $16,000,000.00

G          Number of share(common stock)outstanding    50,000,000

H = F - G       Earning per share for 2019                            $0.32

Therefore,The EPS for 2019 was $0.32