Question 2 Earnings Per Share (EPS)

Bobbys Burgers Inc. started 2020 with the following shares outstanding:

5,000, $1,00, cumulative preferred shares

(No dividends in arrears)

9,000 common shares

The company earned $350,000 during 2020 and had the following share transactions:

Mar 1st Issued 6,000 common shares for trucks valued at $25,000 Aug 1st Repurchased 1,700 common shares at $15/share

Nov 1st Issued 4,700 common shares for $16/share

Required:

a) Calculate Earnings Per Share for Bobbys Burgers Inc. for 2020. (show all your work for full marks)

b) Assuming all other information is similar, if Daves Diner Ltd. had earnings per share of $18.28 for 2020, which companies shares would you chose to invest in if you had to pick one, Bobbys Burgers Inc. or Daves Diner Ltd?