Question

McDonnell-Myer Corporation reported net income of $2,744 million. The company had 553 million common shares outstanding at January 1 and sold 18 million shares on Feb. 28. As part of an annual share repurchase plan, 12 million shares were retired on April 30 for $41 per share. Calculate McDonnell-Myer's earnings per share for the year. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Answer 1

Answer:

$4.9

Explanation:

Total Number of shares outstanding at the end of year:

= Common share outstanding as of Jan 1 + New Shares sold on Feb 28 - Retired Share as on April 30

= 553 million + [18 × (10/12)] -  [12 × (8/12)]

= 553 + 15 - 8

= 560 million

Earning per share = net income ÷ total share outstanding

                              = $2,744 ÷ 560

                              = $4.9