Excerpts from Goodrow Corporation's most recent balance sheet and income statement appear below: Dividends on common stock during Year 2 totaled $20 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $5.34 per share.
-The earnings per share of common stock for Year 2 is closest to:
A)$0.35
B)$0.50
C)$0.30
D)$0.65

Question

Excerpts from Goodrow Corporation's most recent balance sheet and income statement appear below:   Dividends on common stock during Year 2 totaled $20 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $5.34 per share.
-The earnings per share of common stock for Year 2 is closest to:
A)$0.35 
B)$0.50 
C)$0.30 
D)$0.65

Quizplus · Accepted Answer

Number of common shares outstanding = Common stock F1F1F1S1F1F1F10 Par value
= $400 F1F1F1S1F1F1F10 $2 per share = 200 shares
Earnings per share = (Net Income - Preferred Dividends)
F1F1F1S1F1F1F10 Average number of common shares outstanding
= ($70 - $10)F1F1F1S1F1F1F10 (200 shares + 200 shares)/2 = $0.30 per share

Excerpts from Goodrow Corporation's Most Recent Balance Sheet and Income