Peak Performance Sporting Goods Company continues to perform well. Company executives credit this to the strong partnerships it enjoys with category killer and large discount chains. Last week Peak Performance reported basic EPS [earnings per share] = $.80/share. If the firm has 4,000,000 shares outstanding, net income after taxes for the same period =
A) $80,000.
B) $5,000,000.
C) $3,200,000.
D) $32,000.

Question

Quizplus · Accepted Answer

Basic earning per share = Net income after taxes/Number of common stock shares outstanding. This problem asks the student to determine one component of this formula: net income after taxes. Net income after taxes = Basic earnings per share x Number of common stock shares outstanding. Net income after taxes = $.80 x 4,000,000 shares = $3,200,000.

Peak Performance Sporting Goods Company Continues to Perform Well