Javier Company reported net income of $4,550 million in 2019. The weighted average number of common shares outstanding during 2019 was 1,662 million shares. Javier paid $135 million in dividends on preferred stock.
How much is basic earnings per share amount for 2019?
A) $2.61
B) $2.55
C) $2.66
D) $2.75

Question

Quizplus · Accepted Answer

Basic earnings per share (EPS) is calculated by subtracting preferred dividends from net income and then dividing by the weighted average number of common shares outstanding. So, ($4,550 million - $135 million) / 1,662 million shares = $2.66.

Javier Company Reported Net Income of $4,550 Million in 2019