MECCS Inc. has sales of $730000, cost of goods sold of $310000and general and administrative...

MECCS Inc. has sales of $730000, cost of goods sold of $310000 and general and administrative expenses of $200000. Interest expense is $60000, dividends paid is $15000, and depreciation expense is $80000. The tax rate is 21 percent and there are 9400 shares of stock outstanding. what is the earnings per share?

5.46
7.71
5.13
6.72

Expert Solution

Computation of Earning per share (EPS) = Net income/Number of stock outstanding


a	Sales	$ 730,000
b	cost of goods sold	$ 310,000
c	general and administrative expenses	$ 200,000
d	Interest expense	$ 60,000
e	depreciation expense	$ 80,000
f=a-b-c-d-e	Earning before tax	$ 80,000
g	Tax @ 21%	$ 16,800
h=f-g	Net income	$ 63,200
i	Number of stock outstanding	9400
j=h/i	EPS=	$ 6.72


	Ans =	$ 6.72

jeff jeffy answered 3 years ago

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