Question

Calculating and Interpreting EPS Information Wells Fargo reports the following information in its 2015 Form 10-K....

Calculating and Interpreting EPS Information
Wells Fargo reports the following information in its 2015 Form 10-K.

In millions 2015 2014
Wells Fargo net income $22,894 $23,057
Preferred stock dividends $1,424 $1,236
Common stock dividends $7,400 $6,908
Average common shares outstanding 5,136.5 5,237.2
Diluted average common shares outstanding 5,209.8 5,324.4


Determine Wells Fargo's basic EPS for fiscal 2015 and for fiscal 2014.

Round answers to two decimal places. Round answers to two decimal places.

Basic EPS
2015 $Answer
2014 $Answer
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Answer #1
Solution:
Basic EPS
2015 $4.18
2014 $4.17
Working Notes:
Basic EPS = Earnings for Equity shareholders / Average common shares outstanding
2015 2014
Wells Fargo net income $22,894 $23,057
Less: Preferred stock dividends ($1,424) ($1,236)
Earnings for Equity shareholders $21,470 $21,821
÷
Average common shares outstanding 5,136.50 5,237.20
Basic EPS 4.179889029 4.166539372
Basic EPS $4.18 $4.17
Notes: Earnings for Equity shareholders =Net Income - Preferred stock dividends
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