Calculate basic earnings per share with proper solution

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Share-based compensation and EPS

Question 1: As of 1/1/2018, Meder Inc. had 125,000 common shares outstanding. On 3/1/2018, they issued another 24,000 common shares. Meder Inc. declared a 10% stock dividend on May 18, 2018. On June 30th, they issued 50,000 shares of $10 par, 8% non-cumulative preferred stock. On Sept 30, 2018 Meder Inc. repurchased 9,000 shares to hold as treasury stock. Assume no cash dividends were declared and Meder Inc. had net income of $748,000, calculate Basic Earnings Per Share:

Option A $ 4.83

Option B $ 4.44

Option C $ 4.51

Option D $ 4.10

Option E $ 4.76

Reference no: EM132518113

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