Chapter 13, Problem 22Q

To determine

Earnings per Share: Earnings per share help to measure the profitability of a company. Earnings per share are the amount of profit that is allocated to each share of outstanding stock.

Formula:

$\text{Earnings}\text{per}\text{share = }\frac{\text{Net}\text{income – Preferred}\text{dividends}}{\text{Weighted average number of common shares outstanding}}$

To determine:

Earnings per share of a common stock.

Given info:

Net income, Preferred dividends, and weighted average shares of common stock outstanding.