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 equal ________?

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

Earnings per share equal ________?

Explanation / Answer

Net income for 2016               1,062,000,000.00 Preference Dividends for 2015 (9,000,000*100*6%)                     54,000,000.00 Preference Dividends for 2016 (9,000,000*100*6%)                     54,000,000.00 Earnings available for equity shareholders                   954,000,000.00 No of Outstanding shares                   840,000,000.00 Earnings per share for 2016 = Earnings for Eq S/H/ No of shares Earnings per share for2016= 954m/840m Earnings per share for 2016 = $1.14 Note: Assumed net income is after tax as net income in general means after tax

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