Barbur,Inc.reported net income of $12 million.During the year the average number of common shares outstanding was 3 million.The price of a share of common stock at the end of the year was $5.There were 400,000 shares of preferred stock outstanding on average and no dividends were declared and the preferred stock is noncumulative. The EPS is approximately:
A)$0.80.
B)$3.52.
C)$3.72.
D)$4.00.

Question

Quizplus · Accepted Answer

EPS = (Net income − Preferred dividends)÷ Average number of common shares outstanding
= ($12,000,000 − $0)÷ 3,000,000 shares = $4.00 per share