Question

Cullumber Corporation had 2017 net income of $1.7 million. During 2017, Cullumber paid a dividend of...

Cullumber Corporation had 2017 net income of $1.7 million. During 2017, Cullumber paid a dividend of $4 per share on 82,000 preferred shares. Cullumber also had 240,000 common shares outstanding during the year. Calculate Cullumber’s 2017 earnings per share.

Homework Answers

Answer #1

Earning per Share (EPS) is the portion of a company's profit allocated to each share of common stock . Earning per share serve as an indicator of a company's profitability

The formula for EPS is

Earning per share = (Net Income - Preferred Dividends)/Common Shares Outstanding during the year

Net Income During the year is $17 00 000

Preferred Dividend paid = 82000 shares X $ 4 per share =$3 28 000

Common shares outstanding 240000 nos

Earning per share = ($17 00 000 - $3 28 000)/240000 nos = $57.16 per Share

Earning per share = $57.16

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