Finra Exam Series-7 Topic 2 Question 53 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 53
Topic #: 2

Bubba Corporation has net income of $4,200,000. It has 100,000 outstanding shares of 8% preferred stock ($100 par value) and 400,000 shares of common stock ($10 par value).

What are the earnings per share of common stock?

A$8.50

B$6.00

C$4.20

D$10.50

Show Suggested Answer

Suggested Answer: A

$8.50. Subtract the preferred dividend of $800,000 (100,000 x 8% x 100) from the net income. Divide the result of $3,400,000 ($4,200,000 - $800,000) by the 400,000 common shares to obtain $8.50.

by Christiane at Jun 17, 2022, 07:26 AM

Limited Time Offer

25%

Off

Get Premium Series-7 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Currently there are no comments in this discussion, be the first to comment!