A ﬁrm has a proﬁt margin of 9% on sales of $400,000. There are 10,000 shares of common stock outstanding. What is the earnings per share?
A) $1.80
B) $3.60
C) $4.00
D) $36.00
E) $40.00

Question

Quizplus · Accepted Answer

First we need to find the firm's earnings, which is 9% of $400,000 = $36,000. 
Then we can calculate earnings per share by dividing earnings by the number of shares outstanding: $36,000 ÷ 10,000 = $3.60. Thus, the correct choice is B.

A ﬁRm Has a Proﬁt Margin of 9% on Sales