The 2010 annual report of Software City, Inc., included the following comparativ

Question

The 2010 annual report of Software City, Inc., included the following comparative summary of earnings per share over the last three years:

Earnings per share

2010- $3.15
2009- $2.40
2008- $1.64


In 2011, Software City, Inc., declared and distributed a 100 percent stock dividend. Following this stock dividend, the company reported earnings per share of $1.88 for 2011.


a. Prepare a three-year schedule similar to the one above, but compare earnings per share during the years 2011, 2010, and 2009. (Hint: All per-share amounts in your schedule should be based on the number of shares outstanding after the stock dividend.)

Earnings per share

2010-
2009-
2008-

Explanation / Answer

100% stock dividend means no. of outstanding shares will be doubled, and so EPS will be halved So Earnings per share: 2011: $1.88 2010: $3.15/2 = $1.575 = $1.58 2009: $2.40/2 = $1.20

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.