Alphonse Inc. has a return on equity of 23 percent, 60,000 shares of stock outst

Question

Alphonse Inc. has a return on equity of 23 percent, 60,000 shares of stock outstanding, and a net income of $161,000. What are earnings per share? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Alphonse Inc. has a return on equity of 23 percent, 60,000 shares of stock outstanding, and a net income of $161,000. What are earnings per share? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Explanation / Answer

Earnings per share (EPS): This is the ratio of net income and average outstanding shares.

EPS = 161,000/60,000

        = 2.68

Shareholder earns $2.68 from each outstanding share.

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