Question

Suppose the following information (in millions of dollars) is available for Limited Brands for a recent year:

Sales revenue $9,060
Net income $213
Preferred dividend $0
Weighted-average common shares outstanding 300 million.

Required:
Compute the earnings per share for Limited Brands.

Answer 1

Earnings per share (EPS) = $0.71 per share

Step-by-step explanation:

The earnings per share is a metric used by investors in deciding their investment decisions and it is also used as a metric to calculate the corporate value. The earnings per share simply tells the net income earned per each of the common share outstanding. The formula for earnings per share is,

Earnings per share (EPS) = (Net Income - Preferred dividends) / Weighted-average common shares outstanding

Earnings per share (EPS) = (213 - 0) / 300

Earnings per share (EPS) = $0.71 per share