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In: Finance

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

Solutions

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

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