In 2020, Esther Corporation reported net income of $600,000. It declared and paid preferred stock dividends of $150,000 and common stock dividends of $60,000. During 2020, Esther had a weighted average of 300,000 common shares outstanding. Compute Esther's 2020 earnings per share.

$1.50 per share

Explanation:

The formula to compute the earning per share is shown below:

Earning per share = (Net income reported - preferred stock dividend declared) ÷ (Weighted average of common shares outstanding Number of shares)

= ($600,000 - $150,000) ÷ (300,000 shares)

= $1.50 per share

The rest of the items would be ignored for computing the earning per share

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