Staples and OfficeMax are two companies competing in the retail office supply business. OfficeMax had a net

Question:

Staples and OfficeMax are two companies competing in the retail office supply business. OfficeMax had a net income of $91,721,000 for a recent year, while Staples had a net income of $973,577,000. OfficeMax had preferred stock of $54,735,000 with a preferred of 7.375% on that amount. Staples had no preferred stock. The outstanding common shares for each company were as follows:

Common Shares
OfficeMax 73,142,000
Staples 720,528,000

(a) Determine the earnings per share for each company.
(b) Evaluate the relative profitability of the two companies.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...