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Salt Company reports net income of $360 million for 2017; the company's tax rate is 40%. At the beginning of the year, 200 million common shares were outstanding. On July 1, Salt sold an additional 80 million shares and on October 1 distributed a 10% stock dividend. On December 1, the company reacquired 24 million of its outstanding shares.

a. The company's weighted-average shares for the purpose of calculating basic EPS will be ____________.

Respuesta :

The company's weighted-average shares for the purpose of calculating basic EPS will be $1.80

Explanation:

  • Salt Company reports net income of $360 million for 2017; the company's tax rate is 40%. At the beginning of the year, 200 million common shares were outstanding.
  • On July 1, Salt sold an additional 80 million shares and on October 1 distributed a 10% stock dividend.
  • On December 1, the company reacquired 24 million of its outstanding shares.
  • Salt Company reports net income= $360
  • 200 million common shares were outstanding
  • EPS = [tex]\frac{360}{200}[/tex] = $1.80
  • The company's weighted-average shares for the purpose of calculating basic the EPS will be $1.80
  • Earnings per share (EPS) is a company's net profit which is divided by the number of common shares.

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