Profitability Ratios: The following data came from the financial statements of S

Question

Profitability Ratios:

The following data came from the financial statements of St. James Corp. for 2013 and 2012.

Net income $142,000 (2012) $120,000 (2013) Cash dividends paid on preferred stock $15,000 (2012) $15,000 (2013) Cash dividends paid on common stock $42,000 (2012) $38,000 (2013) Weighted average number of preferred shares outstanding 20,000 (2012) 20,000 (2013) Weighted average number of common shares outstanding 105,000 (2012) 95,000 (2013)

Required: Calculate St. James' earnings per share as it would be reported on the 2013 income statement. Round your answer to the nearest cent. $________?

Explanation / Answer

St. James' earnings per share =net income-preferred stock dividend/Weighted average number of common shares outstanding=120,000-15,000/95,000=$1.10per share.

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