Use the information for the question(s)below.
In November 2018,Perrigo Co.(PRGO)had a share price of $39.20.They had 91.33 million shares outstanding,a market-to-book ratio of 3.76.In addition,PRGO had $845.01 million in outstanding debt,$163.82 million in net income,and cash of $257.09 million.
-Perrigo's earnings per share (EPS)is closest to:
A)$0.19.
B)$1.79.
C)$2.81.
D)$3.76.

Question

Quizplus · Accepted Answer

We can calculate the EPS using the formula:
EPS = (Net Income - Preferred Dividends) / Average Outstanding Shares

There is no information given about preferred dividends, so we assume it is 0.
Average Outstanding Shares = 91.33 million

EPS = (163.82 million - 0) / 91.33 million
EPS = $1.795

Therefore, the closest EPS is $1.79, which is answer choice B.

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