Washington Enterprises had net income for 2016 of $ 108 comma 000 $108,000. Wash

Question

Washington Enterprises had net income for 2016 of $ 108 comma 000 $108,000. Washington had 37 comma 000 37,000 shares of common stock outstanding at the beginning of the year and 48 comma 000 48,000 shares of common stock outstanding at the end of the year. There were 10 comma 000 10,000 shares of preferred stock outstanding all year. During 2016, Washington declared and paid preferred dividends of $ 25 comma 000 $25,000. What is Washington's earnings per share? (Round the answer to two decimal place

Explanation / Answer

Particulars

$

Average number of common shares outstanding

(37000+48000)/2

42500

Earnings per share:

(Net income - preference dividends)/average number of common shares Outstanding

(108000-25000)/42500

1.95

Particulars

$

Average number of common shares outstanding

(37000+48000)/2

42500

Earnings per share:

(Net income - preference dividends)/average number of common shares Outstanding

(108000-25000)/42500

1.95

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