Candy Corporation had pretax profits of $1

Finance Dec 23, 2020

Candy Corporation had pretax profits of $1.2 million, an average tax rate of 34 percent, and it paid preferred stock dividends of $50,000. There were 100,000 shares outstanding and no interest expense. What was Candy Corporation's earnings per share?
Select one:
a. $7.42
b. $7.59
c. $4.52
d. $3.91

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Operating profit is known as ______.
Select one:
a. earnings after interest and taxes
b. earnings after tax
c. earnings before depreciation and taxes
d. earnings before interest and taxes

Expert Solution

EPS = (pretax earning*(1-tax rate)-preferred dividednd)/shares o/s

=(1200000*(1-0.34)-50000)/100000 = 7.42

d. earnings before interest and taxes

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