Answer to Question #98380 in Economics for Varsha Chauhan

Question

How to calculate EPS if the formula is Earnings Per Share = Net Income – Preferred Dividend /
Weighted Average Common Shares Outstanding
for given values as follows:
Particulars Amount
Profit before taxes Rs 50 lakhs
Dividend declared per share Rs2
Price of the share prevalent on stock
exchange
Rs 200
Applicable tax rate 35%
Share capital of company 5 lakh shares
of Rs 10 each

Answer 1

How to calculate EPS if the formula is Earnings Per Share = Net Income – Preferred Dividend / Weighted Average Common Shares Outstanding

EPS = ( RS 50-RS 2)/ RS 200

EPS = 0.24