(Answered) Philagem inc ended 2012 with a net profit before taxes of

Finance

Philagem, Inc., ended 2012 with a net profit before taxes of $218,000. The company is subject to a 40% tax rate and must pay $32,000 in preferred stock dividends before distributing any earnings on the 85,000 shares of common stock currently outstanding.

a. Calculate Philagem’s 2012 earnings per share (EPS).

b. If the firm paid common stock dividends of $0.80 per share, how many dollars would go to retained earnings?

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