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how to calculate EPS when the following info is given ;Operating income, interest expense, operating...

how to calculate EPS when the following info is given ;

Operating income, interest expense, operating expense, preferred dividend paid, common dividend paid, tax rate, number of common shares outstanding, opening retained earning balance and share price?

Solutions

Expert Solution

The EPS also known as Earnings per share can be computed as follows:

= (Net Income - preferred dividend paid) / Number of common shares outstanding

= ((Operating income or EBIT - Interest expense) x (1 - tax rate) - preferred dividend paid) / Number of common shares outstanding


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