Question

Peak Performance Sporting Goods Company continues to perform well in spite of an economic recession. Company executives credit this to the strong partnerships it enjoys with category killer and large discount chains. Last week Peak Performance reported basic EPS [earnings per share] = $.80/share. If the firm has 4,000,000 shares outstanding, net income after taxes for the same period = _________.A. $5,000,000.B. $80,000.C. $3,200,000.D. $32,000.

Answer 1

C. $3,200,000

Step-by-step explanation:

Net income = Net income-preferred dividends/ weighted average shares outstanding

In the case of peak performance

EPS = $0.80

Outstanding shares 4,000,000

EPS =net income/ outstanding shares

(EPS) $0.80 = net income/4,000,000

Net income = 4,000,000.00x $0.8

=$3,200,000