Yet Corporation had net earnings of $500,000. It paid $125,000 in dividends to the preferred shareholders. Yet Corporation had a weighted average of 1,500,000 common shares and 250,000 preferred shares. Yet Corporation's earnings per share was:
A) $0.25
B) $0.21
C) $0.33
D) $0.29

Question

Quizplus · Accepted Answer

Earnings per share (EPS) is calculated as (Net Earnings - Dividends to Preferred Shareholders) / Weighted Average Common Shares. Here, ($500,000 - $125,000) / 1,500,000 = $0.25.

Yet Corporation Had Net Earnings of $500,000