Question

On December 31, 2009, Voss Corporation had 150,000 shares of common stock issued and outstanding. On October 1, 2010, an additional 20,000 shares of common stock were issued for cash. During 2010, Voss declared and paid dividends of $100,000 on its 10,000 shares of nonconvertible preferred stock. During 2010, Voss declared and paid dividends of $80,000 on its common stock. Net income for 2010 amounted to $500,000. The earnings per share of common stock (rounded to the nearest cent) for 2010 are

Answer 1

earnings per share = \[(Net Income - Preferred Dividends)/Shares Outstanding\]
thus, \[(500,000-100,000)/170,000\] = 2.353

I am not 100% sure on the calculations, but i believe this is the correct way to go about solving this problem.

Answer 2

RaiderJoey is correct. Since the problem needs the answer to be rounded to the nearest cent, it should be $2.35.