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Earnings per Share of common stock

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5. Vessels Corporation's net income for the most recent year was $2,532,000. A total of 200,000 shares of common stock and 200,000 shares of preferred stock were outstanding throughout the year. Dividends on common stock were $3.80 per share and dividends on preferred stock were $1.25 per share. The earnings per share of common stock is what number? Why?

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The solution computes earnings per share of common stock for Vessels Corporation.

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Total Preferred Dividend = 200000*1.25 = $250,000

Earning per share (EPS) on common stock is calculated ...

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