Problem regarding preferred stock at par value

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Reference no: EM13129786

For the year ended May 31, Year 5, Cooper, Inc. had per-share earnings of $4.80. Cooper's outstanding stock for the Year 4-5 fiscal year consisted of $2 million of 10% preferred with $100 par value and 1 million shares of common. On June 1, Year 5, the common stock split 3 for 1, and the company redeemed one-half of the preferred stock at par value. Cooper Inc.'s net income for the year ended May 31, Year 6 was 10% higher than in Year 5. Basic earnings per share in Year 6 on Cooper's common stock were :

a) $1.76

b) $1.80

c) $5.28

d) $5.40

Reference no: EM13129786

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