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How do I find earnings per share with this information?
I understand that EPS is:
(net income - preferred dividends)/number of shares of common stock outstanding
But I can't seem to find the information - particularly the preferred dividends!
Net income is 1565 and common stock is 18000 with 100 shares issued and outstanding,
How do I find the preferred dividends and calculate earnings per share?
2 Answers
- SandyLv 710 years agoFavorite Answer
Look at the components of your Equity section. If no preferred stock is mentioned there, it means this company does not have preferred stock, so your preferred dividends is zero. In that case, your
EPS = $1,565/100 = $15.65
- smahadevan39Lv 710 years ago
At the time of issuing the Preference share, the rate of interest is stipulated. Suppose if the Preference share is issued at 5% interest, irrespective of the profit they will get only 5%. They will not get any dividend. For the purpose of EPS only the number of common stock is taken into account.
Divide net profit ( after paying preference share interest) by number of common stock = Earning per share.
