Josiah, Inc provides the following information for 2017
Net income $350,000
Market price per share of common stock $50 per share
Dividends paid $180,000
Common stock outstanding at Jan. 1, 2017 160,000 shares
Common stock outstanding at Dec. 31, 2017 250,000 shares
The company has no preferred stock outstanding. Calculate the earnings per share for 2017. (Round your answer to two decimal places.)
A) $0.83 per share
B) $2.19 per share
C) $1.71 per share
D) $1.40 per share
C .C)
Net income $350,000
Avg. number of common shares outstanding / 205,000
Earnings per share* $1.71
* Earnings per share = (Net income - Preferred dividend) / Weighted average number of common shares outstanding =
Average number of common shares outstanding = (160,000 + 250,000 ) / 2
Average number of common shares outstanding = 205,000 shares
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