Question

McDonnell-Myer Corporation reported net income of $3,410 million. The company had 594 million common shares outstanding at January 1 and sold 36 million shares on February 28. As part of an annual share repurchase plan, 6 million shares were retired on April 30 for $44 per share. Calculate McDonnell-Myer's earnings per share for the year. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Answer 1

McDonnell-Myer's earnings per share for the year is $5.82

Step-by-step explanation:

Earnings per share = Earnings Attributable to Holders of Common Stock / Weighted Average Number of Common Shares

Weighted Average Number of Common Shares Calculation :

Outstanding Common Shares - 1 January 594,000,000

Sold - February 28 (2/12×36,000,000) (6,000,000)

Retired - April 30 (4/12×6,000,000) (2,000,000)

Weighted Average Number of Common Shares 586,000,000

Earnings per share = $3,410,000,000/586,000,000

= $5.82