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Earnings per Common Share

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Colaw Company had 300,000 shares of common stock issued and outstanding at December 31, 2006. During 2007, no additional common stock was issued. On January 1, 2007, Colaw issued 400,000 shares of nonconvertible preferred stock. During 2007, Colaw declared and paid $180,000 cash dividends on the common stock and $150,000 on the nonconvertible preferred stock. Net income for the year ended December 31, 2007, was $960,000. What should be Colaw's 2007 earnings per common share, rounded to the nearest penny? ($2.70)

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This solution explains how to calculate earnings per common share of a business.

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7. Colaw Company had 300,000 shares of common stock issued and outstanding at December 31, 2006. During 2007, no additional common stock was issued. On January 1, 2007, Colaw issued 400,000 shares of nonconvertible ...

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