The Enterprise Co.has the following information available from its accounting records:

The company has no preferred stock.What is the earnings per share?
A) $0.40
B) $4.00
C) $4.67
D) $5.60

Question

The Enterprise Co.has the following information available from its accounting records:

The company has no preferred stock.What is the earnings per share?
A) $0.40 
B) $4.00 
C) $4.67 
D) $5.60

Quizplus · Accepted Answer

Earnings per share is calculated as follows:

Net Income available to common shareholders / Number of common shares outstanding

In this case, we are given the following information:

Net Income: $700,000 
Common Shares Outstanding: 150,000

Therefore, Earnings per share = $700,000 / 150,000 = $4.67

Hence, answer is C) $4.67.