ABC Company has net income of $5 million, $40 million of assets, and $10 million of liabilities. The number of outstanding shares of stock is 3 870 000 shares. What are earnings per share?
A) $1.29
B) $0.77
C) $2.35
D) $7.75
E) Earnings per share cannot be computed with the information provided.

Question

Quizplus · Accepted Answer

Earnings per share is calculated as net income divided by the number of outstanding shares of stock.

EPS = Net income / Number of outstanding shares of stock

EPS = $5 million / 3,870,000 shares

EPS = $1.29 per share.

Therefore, the correct answer is A) $1.29.

ABC Company Has Net Income of $5 Million, $40 Million