Epic Company earned a net income of $900,000 this year. The numberof common shar

Question

Epic Company earned a net income of $900,000 this year. The numberof common shares outstanding during the entire year was 400,000,and preferred shareholders received a $20,000 cash dividend.Compute Epic Company's basic earnings pershare. (Round your answer to 2 decimal places. Omitthe "$" sign in your response.)

Basic earnings pershare

$

per share

Epic Company earned a net income of $900,000 this year. The numberof common shares outstanding during the entire year was 400,000,and preferred shareholders received a $20,000 cash dividend.Compute Epic Company's basic earnings pershare. (Round your answer to 2 decimal places. Omitthe "$" sign in your response.)

Explanation / Answer

Earnings per Share (EPS) = [Net Income –Dividends on Preferred Stock] / OutstandingShares

EPS = [$900,000 - $20,000] / 400,000

EPS =   $880,000 / 400,000

EPS =   $2.2

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