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On January 1, 2023 ETP Inc has 20,000 shares of common stock, $10 par issued and outstanding. During 2023, ETP reports net income of


 

On January 1, 2023 ETP Inc has 20,000 shares of common stock, $10 par issued and outstanding. During 2023, ETP reports net income of $200,000 and engages in the following stock related transactions: Feb 1 Issued 1,500 shares of common stock for cash. Mar 1 Issued 3,000 shares of common stock for cash. Mar 1 Paid a $2,000 dividend on preferred stock. May 30 Reacquired 1,000 shares of common stock as treasury stock. July 1 Declared and issued a 15% stock dividend on common stock. November 1 Issued a 2-for-1 stock split, reducing the par value to $5 per share. On December 31, 2023, the market value of ETP common stock is $18 per share. Required: A. Calculate the weighted average number of shares of stock that should be used to calculate EPS for the 2023 income statement. B. How many shares were actually outstanding at year end, 2023? C. Compute the basic EPS that would be disclosed by ETP Inc. D. Compute the Price/Earnings ratio for ETP on December 31, 2023.

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