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Recher Corporation's common stock has a par value of $3 per share and has been stable at a total value of $270,000 on the company's balance sheet for several years. The total stockholders' equity at the end of this year was $1,023,000 and at the beginning of the year was $1,010,000. Net income for the year was $17,500. Dividends on common stock during the year totaled $4,500. The market price of common stock at the end of the year was $3.76 per share. The company's earnings per share is closest to: $7.37 per share $0.45 per share $0.30 per share $0.19 per share

Respuesta :

jepessoa

Answer:

$0.19 per share

Explanation:

number of total stocks outstanding = $270,000 / $3 = 90,000

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

  • net income = $17,500
  • preferred dividends = $0
  • weighted average shares outstanding = 90,000

EPS = $17,500 / 90,000 shares = $0.1944 ≈ $0.19 per share

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