Sperle Corporation has provided the following data concerning its stockholders' equity accounts: Net income for Year 2 was $30,400.Dividends on common stock during Year 2 totaled $6,400.The market price of common stock at the end of Year 2 was $3.08 per share. The company's earnings per share for Year 2 is closest to:

Question

Sperle Corporation has provided the following data concerning its stockholders' equity accounts:  Net income for Year 2 was $30,400.Dividends on common stock during Year 2 totaled $6,400.The market price of common stock at the end of Year 2 was $3.08 per share. The company's earnings per share for Year 2 is closest to:

Quizplus · Accepted Answer

Earnings per share = Net Income ÷ Average number of common shares outstanding*
= $30,400 ÷ 80,000 shares = $0.38 per share (rounded)
*Number of common shares outstanding = Common stock ÷ Par value
= $400,000 ÷ $5 per share = 80,000 shares

Sperle Corporation Has Provided the Following Data Concerning Its Stockholders