Calculate ABCs earnings per share

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Reference no: EM132909332

Question - Earnings Per Share - The Absolute Beginners Company (ABC) has the following Capital Structure on Jan 1, 2021:

Preferred Shares, 8% cumulative, par $10,000, 250,000 outstanding 2,500,000,000

Common Share, 1,000,000 outstanding, 2,500,000 authorized 3,578,000,000

Bonds, 5%, par value of $1,000,convertible into 5 common shares 9,750,000,000

Over the year, several transactions affected the common share account:

On Feb 28, 100,000 common shares were issued for $8,000,000. There were issuing fees of $750,000.

On Jun 30, a 5:1 stock split was declared and paid. Prior to the stock split, the market price of a common share was $5,000.

On Oct 31, 1,000,000 common shares were acquired and retired by ABC.

ABC's Net Income for the year was $750,000,000. Due to a union strike, no dividends were declared for the year. Under normal situations, it is expected that no dividends would have been declared due to investment opportunities.

Required - Calculate ABC's earnings per share for 2021.

Reference no: EM132909332

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