Earning Per Share (EPS) :- EPS is calculated by the following way-
Dividing Earnings available to common stockholders by No. of Common Share outstanding.
EPS= Earnings available to common stockholders/No. of Common Share outstanding
Where,
Earnings available to common stockholders = Net Income - dividend on Preference share.
No. of Common Share outstanding = Total Share Issued - Treasury Shares.
Example:- XYZ a company has 1,10,000 issued common shares. During the year the company's net income is BDT 10,00,000 and pays BDT 2,00,000 as dividend on Preference shares. It has 15,000 shares as treasury stock. Calculate Earning Per Share.
Solution:-
EPS = BDT(10,00,000-2,00,000)/95,000
= BDT 8.421
Dividing Earnings available to common stockholders by No. of Common Share outstanding.
EPS= Earnings available to common stockholders/No. of Common Share outstanding
Where,
Earnings available to common stockholders = Net Income - dividend on Preference share.
No. of Common Share outstanding = Total Share Issued - Treasury Shares.
Example:- XYZ a company has 1,10,000 issued common shares. During the year the company's net income is BDT 10,00,000 and pays BDT 2,00,000 as dividend on Preference shares. It has 15,000 shares as treasury stock. Calculate Earning Per Share.
Solution:-
EPS = BDT(10,00,000-2,00,000)/95,000
= BDT 8.421
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