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Earnings per share

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Calculate earnings per share and comment on the trend.

The Dicker Company has the following pattern of financial data for Years 1 and 2:

Year 1 Year 2

Net Income $40,000 $42,000
Preferred stock (5%) $450,000 $550,000
Weighted average number of
Common shares outstanding 38,000 38,000

Calculate earnings per share and comment on trend.

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Solution Summary

The solution explains how to calculate the earnings per share.

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The Earnings per Share is calculated as (Net Income - Preferred Dividend)/Number of Shares Outstanding

Year1
Net Income = 40,000
Preferred Dividend is ...

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