Homework Answers
| Class A | Class B | |
| Basic EPS | $ 6.62 | $ 1.57 |
Working notes:
Earnings per share indicates the income earned by each share of common stock,
|
Shares Outstanding |
Base dividend per share |
Total Base Dividend |
|
| Class A | 95000 | 6 | 570000 |
| Class B | 680000 | 0.95 | 646000 |
| 775000 | 1216000 |
Remaining earnings after base dividend = $1,700,000 - $1,216,000 = $484,000
Remaining earnings per share = $ 484,000 ÷ 775,000 shares = $ 0.624 (Rounded to 3 decimal)
Basic EPS = Base dividend per share + Remaining earnings per share,
Therefore Basic EPS would be,
- For Class A, EPS = $ 6 + 0.624 = $ 6.624
- For Class B, EPS = $ 0.95 + 0.624 = $ 1.574
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