MANAGEMENT

BUISENESS MANAGEMENT

FINANCIAL MANAGEMENT

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

What are the earnings per share (EPS) for a company that earned $100, 000 last year in after-tax profits, has 200, 000 common shares outstanding and $1.2 million in retained earning at the year end?

A	$100, 000
B	$6.00
C	$0.50
D	$6.50

Explanation:

Detailed explanation-1: -Earnings per share (EPS) is a company’s net profit divided by the number of common shares it has outstanding.

Detailed explanation-2: -Earnings per share (EPS) is calculated by subtracting preferred dividends from net income and dividing that amount by the number of common shares outstanding.

Detailed explanation-3: -Divide net income by the number of issued shares to find the basic profit per share. You simply divide last year’s net income by the total number of issued shares to calculate the earnings per share ratio.

Detailed explanation-4: -10. Basic earnings per share should be calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. 11.

There is 1 question to complete.