Question

Tam Company’s net income for the year ending December 31, 2014, was $10,000. During the year, Tam declared and paid $1,000 cash dividends on preferred stock and $1,750 cash dividends on common stock. At December 31, 2014, the company had 12,000 shares of common stock issued and outstanding—10,000 had been issued and outstanding throughout the year and 2,000 were issued on July 1, 2014. No other common stock transactions occurred during the year, and the 5,000 shares of preferred stock are not convertible into common shares.

Required:
What should be the 2014 earnings per common share of Tam Company, rounded to the nearest penny?



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  • CreatedSeptember 10, 2014
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