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by sanju09 » Thu May 06, 2010 4:53 am
A corporation with 5,000,000 shares of publicly listed stock reported total earnings of $7.20 per share for the first 9 months of operation. During the final quarter the number of publicly listed shares was increased to 10,000,000 shares, and fourth quarter earnings were reported as $1.25 per share. What are the average annual earnings per share based on the number of shares at the end of the year?
(A) $1.83
(B) $2.43
(C) $4.85
(D) $8.45
(E) $9.25
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by liferocks » Thu May 06, 2010 6:53 am
Let 5,000,000=s

earning for s shares $7.2..total earning=7.2s
earning for 2s shares $1.25..total earning=1.25*2s=2.5s

total earning=9.7s

So annual EPS=9.7s/2s=4.85

Ans optionC
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by clock60 » Thu May 06, 2010 11:03 am
also got C
(7.2*5+1,25*10)/10=4.85
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by harshavardhanc » Thu May 06, 2010 12:35 pm
sanju09 wrote:A corporation with 5,000,000 shares of publicly listed stock reported total earnings of $7.20 per share for the first 9 months of operation. During the final quarter the number of publicly listed shares was increased to 10,000,000 shares, and fourth quarter earnings were reported as $1.25 per share. What are the average annual earnings per share based on the number of shares at the end of the year?
(A) $1.83
(B) $2.43
(C) $4.85
(D) $8.45
(E) $9.25
(7.2 * 5 + 1.25 * 10 ) / 12 = 48.5 / 10 = 4.85
Regards,
Harsha
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