Question

Atlas Corporation reported the following earnings per share information in its current annual report. The company has only one class of stock outstanding.
Net income $7,121
Dividends to common shareholders $2,033
Weighted average common shares outstanding 4,221
Weighted average dilutive shares 4,305
Basic and diluted earnings per share were, respectively:____.
a. $1.21 and $1.18.b. $2.17 and $2.13.
c. $1.69 and $1.65.d. $1.69 and $1.18.
e. none of these are correct.

Answer 1

Answer:

c. $1.69 and $1.65

Explanation:

Calculation to determine Basic EPS

Using this formula

Basic EPS =Net income/Weighted average common shares outstanding

Let plug in the formula

Basic EPS = $7,121 / 4,221

Basic EPS = $1.69

Calculation for Diluted EPS

Using this formula

Diluted EPS=Net income/Weighted average dilutive shares

Let plug in the formula

Diluted EPS = $7,121 / 4,305

Diluted EPS = $1.65

Therefore Basic and diluted earnings per share were, respectively:$1.69 and $1.65