Total revenues and net income for 2008 for Smith Lake Corporation is $3,500,000 and $280,000, respectively. Smith Lake Corporation has had 400,000 common shares of stock outstanding for all of 2008. The selling price of Smith Lake Corporation common stock on December 31, 2008, is $18. Earnings per share for 2008 is:

Question

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Earnings per share (EPS) is calculated by dividing net income by the number of common shares outstanding. For Smith Lake Corporation, EPS = $280,000 / 400,000 shares = $0.70.

Total Revenues and Net Income for 2008 for Smith Lake