Kelley Company reports $960,000 of net income and declares $120,000 of cash dividends on its preferred stock

Question:

Kelley Company reports $960,000 of net income and declares $120,000 of cash dividends on its preferred stock for the year. At year-end, the company had 400,000 weighted-average shares of common stock.
1. What is the company’s basic EPS? Round your answer to the nearest whole cent.
2. In the prior year, Kelley had a basic EPS of $1.90. Did Kelly improve its EPS in the current year?

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