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Chapter 16: Q9BE. (page 875)

Kalin Corporation had 2017 net income of \(1,000,000. During 2017, Kalin paid a dividend of \)2 per share on 100,000 shares of preferred stock. During 2017, Kalin had outstanding 250,000 shares of common stock.Compute Kalin’s 2017 earnings per share.

Short Answer

Expert verified

The earnings per share of Kalin for 2017 is $3.20 per share.

Step by step solution

01

Step 1:

Net income: $1,000,000

Dividend $2 per share on 100,000 shares of preferred stock

Outstanding shares of common stock: 250,000

02

Step 2:

EarningPerShare=NetIncome-PreferredDividendsEnd-of-PeriodCommonSharesOutstanding=$1,000,000-100,000×$2250,000=$3.20

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Most popular questions from this chapter

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Instructions

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