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Reunion Corporation provides the following information. March 31, 2018 March 31, 2019 Net Income Preferred Dividends Total Stockholders' Equity Stockholders' Equity attrbutable to Preferred $425,500 $4.380,00 $5,1320 $5,132,000 Stock Number of Common Shares Outstanding 294464 195,1 Based on the information provided above, compute the earnings per share of Reunion Corporation as of March 31, 2019. (Round any intermediate calculations and your final answer to the nearest cent.)A) $1.22 B) $2.18 C) $1.74 D) $1.46

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Answer:

C) $1.74

Explanation:

                                                                              2018              2019

Net Income                                                       $358,000      $425,500

Preferred Dividends                                               $0                  $0

Total Stockholders' Equity Stockholders'    $4,380,000    $5,132,000

Equity attributable to Preferred Stock                   $0                  $0

Number of Common Shares Outstanding        294,464         195,168

earnings per share = (net income - preferred dividends) / average outstanding shares

  • net income 2019 = $425,500
  • preferred dividends 2019 = $0
  • average number of common stocks = (294,464 + 195,168) / 2 = 244,816

EPS = $425,500 / 244,816 = $1.738 ≈ $1.74

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