Chapter 20, Problem 20.1E

Computing Basic and Diluted EPS, Preferred Stock. Start Stamping began the current year with 450,000 common shares outstanding. The firm has $1,150,000 par value 3% nonconvertible, noncumulative preferred stock outstanding. The preferred shares were outstanding for a full year and the firm declared preferred dividends for the current year. The company’s net income is $3,500,000 Based on this information, compute basic earnings per share for the current year.