25．Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.

An analyst gathered the following information about a company whose fiscal year ends on 31 December:

Net income for the year was $10.5 million.

Preferred stock dividends of $2 million were paid for the year.

Common stock dividends of $3.5 million were paid for the year.

20 million shares of common stock were outstanding on 1 January 2002.

The company issued 6 million new shares of common stock on 1 April 2002.

The capital structure does not include any potentially dilutive convertible securities, options, warrants, or other contingent securities.

The company's basic earnings per share for 2002 was closest to:

Select exactly 1 answers from the following:

A. $0.35. B. $0.37. C. $0.43. D. $0.46.
答案和详解如下！
Feedback: Correct answer: A

2006 CFA Level I Program Readings, 揇ilutive Securities and Earnings per Share,?Ch. 16, pp. 788?01, Intermediate Accounting, 11th edition, Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield (Wiley, 2004), pp. 301-302

2006 Modular Level I, Vol. II, pp. 695-696

Study Session 8-36-a

differentiate between simple and complex capital structures for purposes of calculating earnings per share (EPS), describe the components of EPS, and calculate a company抯 EPS in a simple capital structure

Basic earnings per share is equal to income available to common stockholders divided by the weighted average number of common shares outstanding:

($10,500,000 ?$2,000,000) / 24,500,000 shares = $0.35.

a