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For 2010, Fielder Corporation reported net income of $30,000; net sales $400,000; and average shares outstanding of 6,000. There were no preferred stock dividends. What was the 2010 earnings per share?
a) $4.66
b) $0.20
c) $66.67
d) $5.00
Why must preferred stock dividends be subtracted from net income in computing earnings per share? Why is common stock usually not issued at a price that is less than par value?
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