Effects of stock split and stock dividend on EPS Required: a. For the year ended December 31,

Question:

Effects of stock split and stock on EPS

Required:
a. For the year ended December 31, 2009, Finco, Inc., reported earnings per share of $3.12. During 2010 the company had a 3-for-1 stock split. Calculate the 2009 earnings per share that will be reported in Finco’s 2010 annual report for comparative purposes.
b. During 2011 Finco had a 2-for-1 stock split. Calculate the 2009 earnings per share that will be reported in Finco’s 2011 annual report for comparative purposes.
c. If Finco had issued a 10% stock in 2010 and did not have a stock split, calculate the 2009 earnings per share that will be reported in Finco’s 2010 annual report for comparative purposes. Round your answer to two decimal places.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...