Question

X Company: Income Statements for the Years Ending December 31 ( Millions of Dollars, Except for Per Share Data) 2018 2019 . Calculate Earnings Per Share and Dividend Per Share for 2018 and 2019.

X Company: Income Statements for the Years Ending December 31 ( Millions of Dollars, Except for Per Share Data)
		2018	2019
Net Sales		4000	4250
	Operating Costs except depreciation and amortization	3750	3900
	Depreciation and amortization	100	90
Total operating costs		3850	3990
Operating income, or earnings before interest and taxes		150	260
	Less interest	50	60
Earnings before taxes		100	200
	Taxes (25%)	25	50
Net Income		75	150
Total Dividends		25	25
Additional to retained earning		50	125
Calculate
Common Stock Price		25	25
Earnings Per Share		______________	____________________
Dividend Per Share		______________	____________________
Note: X company has 30 million shares of common stocks outstanding. Earnings Per Share is based on net income available to common stockholders

Answer 1

Answer :

Calculation of Earning Per share

Earning Per share = Net income for common stock holders / Total Number of sharares outstanding

Earning Per share in 2018 = Net income for common stock holders / Total Number of sharares outstanding

= 75 / 30

= 2.5

Earning Per share in 2019 = Net income for common stock holders / Total Number of sharares outstanding

= 150 / 30

= 5

Calculation of Dividend Per share

Dividend Per share = Dividend for common stock holders / Total Number of sharares outstanding

Earning Per share in 2018 = Dividend for common stock holders / Total Number of sharares outstanding

= 25 / 30

= 0.8333

Dividend Per share in 2019 = Dividend for common stock holders / Total Number of sharares outstanding

= 25 / 30

= 0.8333