Asked by Haktan Öztürkçü on Jun 10, 2024
Verified
Hernande Corporation has provided the following data: The company's earnings per share for Year 2 is closest to:
A) $4.25 per share
B) $0.43 per share
C) $0.61 per share
D) $0.75 per share
Earnings Per Share
A measure of a company's profitability, calculated by dividing the company's profit by the number of outstanding shares of its common stock.
- Compute and elucidate the price-earnings ratio.
Verified Answer
NB
Nicole Bires '20Jun 11, 2024
Final Answer :
B
Explanation :
To find earnings per share, divide net income by the number of outstanding shares of common stock.
From the given data, we have net income for Year 2 as $7,075,000 and outstanding shares of common stock as 16,500,000.
Therefore, earnings per share for Year 2 = $7,075,000 ÷ 16,500,000 = $0.43 per share.
Hence, option B is the closest answer.
From the given data, we have net income for Year 2 as $7,075,000 and outstanding shares of common stock as 16,500,000.
Therefore, earnings per share for Year 2 = $7,075,000 ÷ 16,500,000 = $0.43 per share.
Hence, option B is the closest answer.
Learning Objectives
- Compute and elucidate the price-earnings ratio.
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