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18 November, 21:19

McDonnell-Myer Corporation reported net income of $741 million. The company had 544 million common shares outstanding at January 1 and sold 36 million shares on Feb. 28. As part of an annual share repurchase plan, 6 million shares were retired on April 30 for $47 per share. Calculate McDonnell-Myer's earnings per share for the year.

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  1. 18 November, 23:28
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    McDonnell-Myer's earnings per share for the year is $1.3

    Explanation:

    Given data

    net income = $741 million

    common shares = 544 million

    sold share = 36 million

    shares were retired = 6 million

    per share = $47

    to find out

    McDonnell-Myer's earnings per share for the year

    solution

    we know common shares outstanding at 1 January = 544 million

    so we say share sold 28 feb = 36 million that mean = 36 * (10/12) = 30

    and share repurchased 30 April = 6 million that mean = 6 * (8 / 12) = 4

    so total no of share outstanding at end of year = 544 + 30 - 4 = 570 million

    so

    earning per share = net earning / no of share

    earning per share = 741 / 570

    earning per share = $ 1.3

    McDonnell-Myer's earnings per share for the year is $1.3
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