On December 31, 2017, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $400,000 and $75,000 to common and preferred shareholders, respectively, on December 15, 2018. On February 28, 2018, Dow sold 60,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2018, was $2,100,000. The income tax rate is 40%. Required: Compute Dow's earnings per share for the year ended December 31, 2018. (Do not round intermediate calculations. Enter your answers in thousands.)
On December 31, 2017, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $400,000 and $75,000 to common and preferred shareholders, respectively, on December 15, 2018. On February 28, 2018, Dow sold 60,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2018, was $2,100,000. The income tax rate is 40%. Required: Compute Dow's earnings per share for the year ended December 31, 2018. (Do not round intermediate calculations. Enter your answers in thousands.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On December 31, 2017, Dow Steel Corporation had 600,000 shares of common stock and
300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and
outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends
of $400,000 and $75,000 to common and preferred shareholders, respectively, on
December 15, 2018. On February 28, 2018, Dow sold 60,000 common shares. In keeping
with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net
income for the year ended December 31, 2018, was $2,100,000. The income tax rate is
40%. Required: Compute Dow's earnings per share for the year ended December
31, 2018. (Do not round intermediate calculations. Enter your answers in thousands.)
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