Ask Question
16 November, 02:22

Mayan Company had net income of $32,670. The weighted-average common shares outstanding were 9,900. The company declared a $4,600 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions.

The company's earnings per share is:

A.) $2.84.

B.) $3.30.

C.) $2.59.

D.) $3.51.

E.) $3.76.

+5
Answers (1)
  1. 16 November, 02:33
    0
    The correct option is A, earnings per share is $2.84

    Explanation:

    Earnings per share is given earnings attributable to ordinary shareholders divided weighted average common shares.

    The net income needs to be adjusted to reflect only earnings distributable to common shares.

    Earnings to common stocks=$32670-$4600

    =$28070

    Weighted average common shares=9900

    Earnings per share=$28070/9900

    =$2.84 per share

    Option B is wrong because it calculated earnings per share with net income instead of earnings of common shareholders ($32670/9900=$3.30)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Mayan Company had net income of $32,670. The weighted-average common shares outstanding were 9,900. The company declared a $4,600 dividend ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers