Question

Net Income for the period totaled OMR75,000,preferred dividends paid totaled OMR10,000 and common dividends paid totaled OMR30,000.If there 100,000 common shares outstanding throughout the year.What was the earnings per common share

(a)44.50 OMR

(b)0.35 OMR

(c)0.65 OMR

(d) 4.50 OMR

Answer 1

Calculation of Earnings  Per Common Share

Given information in the problem

Net Income for the period totaled = OMR75,000

preferred dividends paid totaled  = OMR 30,000

common shares outstanding throughout the year = 1,00,000

Earnings Per Share = Net Income - Dividends on Preferred Stock / Average outstanding shares

 = 75,000 - 10,000 /  1,00,000

 = 0.65 OMR

option (c)0.65 OMR is the correct option

 

 

 

option (c)0.65 OMR is the correct option