Bedazzle Corporation had 440000 shares of common stock outstanding during the year. Norman declared and paid cash dividends of $400000 on the common stock and $320000 on the preferred stock. Net income for the year was $1760000. What is Bedazzle's earnings per share?

Question

Quizplus · Accepted Answer

First, we need to subtract the preferred dividends from the net income: 
$1,760,000 - $320,000 = $1,440,000
Then, we need to divide the result by the weighted average number of common shares outstanding: 
$1,440,000 ÷ 440,000 = $3.27 per share.

Bedazzle Corporation Had 440000 Shares of Common Stock Outstanding During