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    jenhawk's Avatar
    jenhawk Posts: 1, Reputation: 1
    New Member

    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's Avatar
    bhet Posts: 77, Reputation: 9
    Junior Member

    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=??


    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.




    Common shares outstanding+prfference shares converted to common shares.

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