A company had net income of $250,000.On January 1,there were 12,000 shares of common stock outstanding.On May 1,the company issued an additional 9,000 shares of common stock.The company declared a $7,900 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company had an earnings per share of:
A)$13.45
B)$13.89
C)$11.53
D)$26.90
E)Amount cannot be determined as problem does not state if there are any dividends in arrears

Question

Quizplus · Accepted Answer

{$250,000 - $7,900/[(12,000 x 4/12) + (21,000 x 8/12)]} = $13.45

A Company Had Net Income of $250,000