A firm reports Net After-Tax Income of $250,000.Its board of directors declared preferreddividends of $35,000.If the firm has 90,000 common shareholders,what would be the firm's EPS for the fiscal year?

Question

Quizplus · Accepted Answer

Earnings Per Share (EPS) is calculated by subtracting preferred dividends from net income and then dividing by the number of common shares. Here, EPS = ($250,000 - $35,000) / 90,000 = $215,000 / 90,000 = $2.39.

A Firm Reports Net After-Tax Income of $250,000