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During 2013, Pattar Corp reported after-tax profit of $450,000 and paid $75,000 in common dividends. The weighted average number of common shares issued in 2013 was 150,000. There are no preferred shares issued. At year end, Pattar's common shares are selling for $60 per share on the Toronto Stock Exchange.
-Pattar's earnings per share for 2013 is
A)$25.00.
B)$20.00.
C)$3.00.
D)$2.50.

Question

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During 2013, Pattar Corp reported after-tax profit of $450,000 and paid $75,000 in common dividends. The weighted average number of common shares issued in 2013 was 150,000. There are no preferred shares issued. At year end, Pattar's common shares are selling for $60 per share on the Toronto Stock Exchange.
-Pattar's earnings per share for 2013 is
A)$25.00.
B)$20.00.
C)$3.00.
D)$2.50.

Quizplus · Accepted Answer

Earnings per share (EPS) is calculated as after-tax profit divided by weighted average number of common shares. Thus, EPS = $450,000/150,000 = $3.00.

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