Doonan Corporation has provided the following financial data from its balance sheet and income statement:
The market price of common stock at the end of Year 2 was $4.79 per share.
-The company's earnings per share for Year 2 is closest to:
A) $6.33 per share
B) $0.29 per share
C) $0.45 per share
D) $0.62 per share

Question

Doonan Corporation has provided the following financial data from its balance sheet and income statement:
  The market price of common stock at the end of Year 2 was $4.79 per share.
-The company's earnings per share for Year 2 is closest to:
A) $6.33 per share 
B) $0.29 per share 
C) $0.45 per share 
D) $0.62 per share

Quizplus · Accepted Answer

Earnings per share = Net Income ÷ Average number of common shares outstanding*
= $26,300 ÷ 90,000 shares = $0.29 per share (rounded)
*Number of common shares outstanding = Common stock ÷ Par value
= $360,000 ÷ $4 per share = 90,000 shares

Doonan Corporation Has Provided the Following Financial Data from Its