Question

Makers Corp. had additions to retained earnings for the year just ended of $194,000. The firm paid out $184,000 in cash dividends, and it has ending total equity of $4.89 million. The company currently has 120,000 shares of common stock outstanding. a. What are earnings per share

Answer 1

Makers Corp.

The Earnings Per Share are:

= $3.15.

Step-by-step explanation:

a) Data and Calculations:

Additions to retained earnings for the year = $194,000

Cash dividends paid out = 184,000

Net income = $378,000

Total equity = $4.89 million

Outstanding shares = 120,000

Earnings per share = Net Income/Outstanding shares

= $378,000/120,000

= $3.15

b) The earnings per share (EPS) is a financial metric that is widely used to corporate value. It indicates the amount of money that a company makes for its stockholders per share. It is computed by dividing the net income by the number of outstanding shares.