Question

Calculator eBook EPS Pacific Gas and Electric Company is a large gas and electric utility operating in northern and central California. Three recent yea Fiscal Years Ended (in millions) Year 3 Year 2 Year 1 $888 $1,450 $828 Net Income Preferred dividends $14 $14 $14 Average number of common shares outstanding 484 468 a. Determine the earnings per share for fiscal Year 3 Year 2, and Year 1. Round to two decimal places. Year 3 Earnings $ 1.81 per share Year 2 Earnings $ 3.07 per share Year 1 Earnings $ 1.83 per share b. Evaluate the growth in earnings per share for the three years in comparison to the growth in net income for the three years. R. Earnings per share growth as a percent of Year 1 (base year) Year 3 5.46 % Year 2 1 95 Year 1 Earnings 67.76 X Net Income growth as a percent of Year 1 (base year > Year 3 Year 2 Year Earnings Recall the demon of Eps. What impact does preferred stock have on EPS? Cider Work All work saved Welcome to the team for the Brandi! You #lon the to

Answer 1

Answer b.

Year 1:

Earnings per share growth = EPS, Year 1 / EPS, Year 1
Earnings per share growth = $1.83 / $1.83
Earnings per share growth = 100%

Net income growth = Net income, Year 1 / Net income, Year 1
Net income growth = $828 / $828
Net income growth = 100%

Year 2:

Earnings per share growth = EPS, Year 2 / EPS, Year 1
Earnings per share growth = $3.07 / $1.83
Earnings per share growth = 168%

Net income growth = Net income, Year 1 / Net income, Year 1
Net income growth = $1,450 / $828
Net income growth = 175%

Year 3:

Earnings per share growth = EPS, Year 3 / EPS, Year 1
Earnings per share growth = $1.81 / $1.83
Earnings per share growth = 99%

Net income growth = Net income, Year 3 / Net income, Year 1
Net income growth = $888 / $828
Net income growth = 107%