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Basic Earnings Per Share (EPS)

An analyst gathered the following information about a company whose fiscal year end is December 31:
• Net income for the year was $10.5 million.
• Preferred stock dividends for $2 million were declared and paid for the year.
• Common stock dividends of $3.5 million were paid for the year.
• There were 20 million shares of common stock outstanding on January 1, 2011.
• The company issued 6 million new shares of common stock on April 1, 2011.
• The capital structure does not include any potentially dilutive convertible securities, options, warrants, or other contingent securities.

What would the company's basic earnings per share be for 2011? Show calculations.

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See the attached file.

An analyst gathered the following information about a company whose fiscal year end is December 31:
• Net income for the year was $10.5 million.
• Preferred stock dividends for $2 million were declared and paid for the year.
• Common stock dividends of ...

Solution Summary

This tutorial shows the student how to calculate basic earnings per share. All calculations are shown.

$2.19