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Karen Torkelson
Jan 11, 2014, 10:32 AM
A company has $600,000 earnings after taxes in 2009 with 300,00 shares of stock outstanding.

I need to calculate earnings per share. In my text it uses dividends paid to common stockholder as part of the equation in a previous sample, but this assignment does not mention that. What am I missing?

pready
Jan 12, 2014, 09:30 AM
Earnings per share = (Net Income - Dividends paid to Preferred Stockholders) / Average Outstanding Common Shares

So just take your earnings (net income) and divide it by your shares of common stock outstanding to get your answer.