Morgan Company reported the following information for the year ended December 31, 2015: Net income $ 600,000
Preferred dividends declared and paid 60,000
Common dividends declared and paid 90,000
Average common shares outstanding 90,000 Ending market price per share 45
Net sales 5,100,000
What was Morgan's earnings per share for 2015?
A) $6.67
B) $6.00
C) $5.11
D) $0.15

Question

Quizplus · Accepted Answer

Earnings per share (EPS) is calculated by subtracting preferred dividends from net income and then dividing by the average common shares outstanding. For Morgan Company, EPS = ($600,000 - $60,000) / 90,000 = $540,000 / 90,000 = $6.00.

Morgan Company Reported the Following Information for the Year Ended