jenhawk Posts: 1, Reputation: 1 New Member #1 Jun 15, 2007, 10:14 PM
calculate earnings per share
Net income = \$182
... Year1... Year2
Preferred stock, \$5 par, 15%... \$120... \$120
Common stock, \$10 par... \$220... \$220
Additional paid-in capital-common stock... \$110... \$110
Retained earnings... \$1050... \$940
Ttl stockholders' equity... \$1500... \$1390
 bhet Posts: 77, Reputation: 9 Junior Member #2 Jun 18, 2007, 04:53 AM
I don't have any calculators on hand so just follow the instructions.

If it is BASIC earnings per share

We assume that the prefference shares are not converted (if the preference shares are convertible) into common shares.

APIC+Retained Earnings+Net Income=??

DEDUCT:

Prefference rate. Xxx

DIVIDE it by the number of shares outstanding.

If it is DILLUTED earnings per share:

First convert the prefference share and we assume the conversion happened on the beginning of the year.

APIC+RE+NI

Divide

Common shares outstanding+prfference shares converted to common shares.

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