For 2016, Skresso Co. reported $1.82 of earnings per share of common stock. During 2017, the firm had a 4% common stock dividend. The 2016 earnings per share to be reported in the annual report for 2017 are:

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When a stock dividend is issued, the earnings per share (EPS) for previous years must be adjusted to reflect the increased number of shares. A 4% stock dividend means the number of shares increased by 4%, so the 2016 EPS should be adjusted by dividing $1.82 by 1.04, resulting in approximately $1.75.