At December 31, 2015 and 2016, Funk & Noble Corporation had outstanding 840 mill

Question

At December 31, 2015 and 2016, Funk & Noble Corporation had outstanding 840 million shares of common stock and 9 million shares of 6%, $100 par value cumulative preferred stock. No dividends were declared on either the preferred or common stock in 2015 or 2016. Net income for 2016 was $1,062 million. The income tax rate is 40%.

Calculate earnings per share for the year ended December 31, 2016. (Round your answer to 2 decimal places.)

Earnings per share =   ?

Calculate earnings per share for the year ended December 31, 2016. (Round your answer to 2 decimal places.)

Earnings per share =   ?

Explanation / Answer

EPS = (net income -Preferred dividend paid) /number of common shares

           = (1062 - 0) / 840

          = $ 1.26 per share

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