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

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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 2 years ago

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