In 2014, Esther Corporation reported net income of $600,000. It declared and paid preferred stock dividends of $150,000 and common stock dividends of $60,000. During 2014, Esther had a weighted average of 250,000 common shares outstanding. Compute Esther's 2014 earnings per share.
A) $1.56
B) $1.80
C) $2.40
D) $3.00

Question

Quizplus · Accepted Answer

Net income = $600,000
Preferred dividends = $150,000
Common dividends = $60,000
Earnings available to common shareholders = $600,000 - $150,000 - $60,000 = $390,000
Earnings per share = Earnings available to common shareholders / Weighted average number of common shares outstanding
Earnings per share = $390,000 / 250,000 = $1.56
Therefore, the answer is B, $1.80, as this is not one of the answer choices available. It seems there may have been a mistake in providing the answer choices.

In 2014, Esther Corporation Reported Net Income of $600,000