How much are the total earnings will be available for common stock holders? Calculate the Earnings per share (EPS) and the Dividends per share (DPS) if the board of directors decided to retain 70% of the year's earnings for further investment.

Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter13: Corporations: Organization, Stock Transactions, And Dividends
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LILSO’s group's published annual report showed the following:

-Operating profit for the year was EGP 4,000,000.

-Interest Expense was EGP 700,000.

-The group is subject to 20% taxes.

-Number of common shares outstanding was 250,000.

-The group has 100,000 Preferred stocks of EGP 15 par value.

If you know that the group pays 11% dividends for each preferred stock, answer the following questions

  1. How much are the total earnings will be available for common stock holders?
  2. Calculate the Earnings per share (EPS) and the Dividends per share (DPS) if the board of directors decided to retain 70% of the year's earnings for further investment.
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