Question

Ecker Company reports $1,625,000 of net income and declares $227,500 of cash dividends on its preferred stock for the year. At year- end, the company had 390,000 weighted average shares of common stock.

 1. What amount of net income is available to common stockholders? 

Net income
To preferred stockholders
Net income available to common stockholders	$	0

2. What is the company's basic EPS?

Basic Earnings per Share
Choose Numerator:	/	Choose Denominator:		Basic Earnings per Share
	/		=	Basic earnings per share
	/		=

Answer 1

1
Net income	1625000
To preferred stockholders	227500
Net income available to common stockholders	1397500
2
Basic Earnings per share
Choose Numerator:	/	Choose Denominator:	=	Basic earnings per share
Net income available to common stockholders	/	Weighted-average outstanding shares	=	Basic earnings per share
1397500	/	390000	=	3.58