A firm has EBIT of $4.5 million,interest expense of $400,000,and pays taxes of $1.2 million.If the firm has 2 million shares outstanding,what is the firm's EPS?
A)$1.45
B)$2.25
C)$1.65
D)$0.69
E)$1.00

Question

Quizplus · Accepted Answer

To calculate EPS (Earnings Per Share), first, we need to find the net income by subtracting interest expense and taxes from EBIT. Net Income = EBIT - Interest Expense - Taxes = $4.5 million - $0.4 million - $1.2 million = $2.9 million. Then, divide the net income by the number of shares outstanding to find EPS: EPS = $2.9 million / 2 million shares = $1.45 per share.

A Firm Has EBIT of $4