Question

Corporation B reported earnings per share of​ $10. Corporation B has​ 100,000 shares of common stock outstanding and reported an increase in​ owners' equity of​ $400,000 for the period. Corporation B paid​ $50,000 in interest expense during the period. Corporation B paid dividends per share of

Answer 1

Answer:

$6 per share

Explanation:

Interest expense does not impact owner's equity, as is paid before tax and is not part of net earnings for equity.

Further provided earnings per share = $10

Therefore, total earnings for equity = $10 $\times$ 100,000 = $1,000,000

Out of this only $400,000 forms part of increase in owner's equity.

Thus dividend = Total earnings - Increase in owner's equity

= $1,000,000 - $400,000 = $600,000

Dividend per share = $600,000/100,000 = $6 per share.