Answered: Net income is $200,000, preferred…

Net income is $200,000, preferred dividends are $20,000, and average common shares outstanding are 50,000. How much is earnings per share? $0.25 O $4.00 O $0.28 O $3.60

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Net income is $200,000, preferred dividends are $20,000, and average common shares outstanding are 50,000. How much is earnings
per share?
O $0.25
O $4.00
O $0.28
O $3.60
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Expert Solution

Step 1 : Formula used

Earnings per share = $\frac{N e t i n c o m e - P r e f e r r e d d i v i d e n d}{A v e r a g e c o m m o n s h a r e s o u t s \tan d i n g}$

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