Reference no: EM133188862

Question - A company ends year one with 100,000 shares of common stock and 30,000 shares of preferred stock outstanding. Net income for the year is reported as $400,000. During the year, the company paid a $1 per share cash dividend on its common stock and a $2 per share cash dividend on its preferred stock. The number of preferred shares and common shares outstanding did not change during the year. Determine the company's basic earnings per share.

A) $2.50 per share

B) $3.40 per share

C) $4.00 per share

D) $4.84 per share

E) $2.13 per share