Given that Company A has a Net Income of $10 and 10 shares outstanding, what is its EPS (Earnings Per Share)?

• A. $0.50
• B. $1.00
• C. $2.00
• D. $1.50

Answer: (B)

To calculate Earnings Per Share (EPS), you divide the company’s net income by the number of shares outstanding. In this case, Company A has a net income of $10 and 10 shares outstanding.

The formula for EPS is:

[ \text{EPS} = \frac{\text{Net Income}}{\text{Shares Outstanding}} ]

Plugging in the numbers:

[ \text{EPS} = \frac{10}{10} = 1.00 ]

Thus, the EPS for Company A is $1.00, which matches the choice selected. This figure reflects the earnings attributable to each share of common stock, making it a fundamental measure of a company's profitability on a per-share basis. Understanding EPS helps investors gauge the financial health of the company and perform comparisons with other companies in the same industry.