The net income of Zia company for the year ended December 31, 2018 amounted to P5,600,000. Determine the earnings per share of Zia in the following independent cases: a. The entity has only one class of share capital, 100,000 shares with par value of P100. The entity has two classes of share capital: Preference share, 10% cumulative, P100 par 4,000,000 Ordinary share, P100 par, 100,000 shares 10,000,000 b. The entity has two classes of share capital: Preference share, 10% noncumulative, P100 par 4,000,000 Ordinary share, P100 par, 100,000 shares 10,000,000 The preference dividend for the current year was declared. c. The entity has two classes of share capital: Preference share, 10% noncumulative, P100 par 4,000,000 Ordinary share, P100 par, 100,000 shares 10,000,000 The preference dividend for the current year was not declared.
Dividend Policy
A dividend is a part of the profit paid to the shareholder in an organization. The management of the organization has the right to decide the policy for giving a dividend from the earnings to the shareholder. However, an organization is not in the obligation to declare a dividend for the investor. Dividend policy differs from organization to organization. As the management has the only authority to decide dividend rate, dividend amount, and time of dividend payout by considering all other elements that create an impact on the payment of a dividend.
Stocks And Dividends
Stock or equities are generally sold and bought in the Stock Exchange or which is popularly known as the stock market. Stocks are issued in the Stock Exchange for the sole purpose of raising funds for the Corporation or the company itself. Now since an individual has purchased a portion of the Corporation or company, he or she may claim to be a part of the earnings or profit of the company.
The net income of Zia company for the year ended December 31, 2018 amounted to P5,600,000. Determine the earnings per share of Zia in the following independent cases: a. The entity has only one class of share capital, 100,000 shares with par value of P100. The entity has two classes of share capital:
Ordinary share, P100 par, 100,000 shares 10,000,000
b. The entity has two classes of share capital:
Preference share, 10% noncumulative, P100 par 4,000,000
Ordinary share, P100 par, 100,000 shares 10,000,000
The preference dividend for the current year was declared.
c. The entity has two classes of share capital:
Preference share, 10% noncumulative, P100 par 4,000,000
Ordinary share, P100 par, 100,000 shares 10,000,000
The preference dividend for the current year was not declared.
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