RAR had net income for 2014 of $40,000. RAR had 13,500 shares of C/stock outstanding at the beginning of the yr & 14,500 shares of C/stock outstanding as of Dec 14. During yr, RAR declared & paid preferred dividends of $3,000.
Earnings per share is based on shares outstanding on the date of dividend declaration.
So earing's per share is: 3000/ 14500 = 0.21 $ = 21 cents
Answer: 21 cents earnings per share
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