At December 31, 2015 and 2016, Funk & Noble Corporation had outstanding 960 mill

Question

At December 31, 2015 and 2016, Funk & Noble Corporation had outstanding 960 million shares of common stock and 12 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 $1,512 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.)

At December 31, 2015 and 2016, Funk & Noble Corporation had outstanding 960 million shares of common stock and 12 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 $1,512 million. The income tax rate is 40%.

Explanation / Answer

Calculate earning per share :

Earning per share = (net income-Preferred dividend)/Outstanding shares

= (1512-12*100*6%)/960

Earning per share = 1.50 per share

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