ZZZ Corporation Had Net Income of $100 Million Last Year

question 28

Multiple Choice

ZZZ Corporation had net income of $100 million last year and 50 million common shares outstanding. They declared an 8% stock dividend. Calculate EPS before and after the stock dividend.

• A) EPS before would be $2; after the dividend, EPS would be $1.85.
• B) EPS before would be $0.50; after the dividend, EPS would be $0.46.
• C) Since they made $100 million in net income, the EPS cannot change.
• D) There is not enough information to make this calculation.

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