Question

Jupiter Corporation has 1.70 million shares outstanding and debt that leads to annual interest payments of $1.12 million. The corporate tax rate is 25%. Calculate Jupiter's earnings per share (EPS) if earnings before interest and taxes EBIT) is 3.36 million?

Answer:$

Place your answer in dollars and cents. Do not include a dollar sign in your answer.

Answer 1

Place your answer in dollars and cents. Do not include a dollar sign in your answer.

- Earnings Before Interest and Taxes (EBIT) = $3.36 million

Net Income = (EBIT - Annual Interest Expenses)*(1-Tax Rate)

=($3.36 million - $1.12 million)*(1-0.25)

= $1.68 million

No of Shares outstanding = 1.70 million shares

Earnings per Share(EPS) = Net Income/No of Shares outstanding

=$1.68 million/$1.70 million

= 0.99 per share

So, Jupiter's earnings per share (EPS) is $0.99 per share

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