Pools Inc SPI reported the following in its financial statem

Pools Inc. (SPI) reported the following in its financial statements for the quarter ended March 31, 2015 December Common Stock, $1 par, 57,000 shares outstanding Additional Paid-In Capital Retained Earnings 31, 2014 31, 2015 57,000 $57,000 34,200 34.200 22,80022,800 Total Stockholders Equity $114,000 $114,000 During the quarter ended March 31, SPI reported Net Income of $4,560 and declared and paid cash dividends totaling $4,560 Required: 1. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended March 31. (Round \"Earnings per Share\" to 2 decimal places and \"Return on Equity\" to 1 decimal place.) Return on Equity % 2. Assume SPl repurchas es 10,700 of its common stock at a price of S$2 per share on April 1, 2015. Also assume that during the quarter ended June 30, 2015, SPI reported Net Income of $4,560 and dividends totaling $4,560. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended June 30, 2015 (Round \"Earnings per Share\" to 3 decimal places and \"Return on Equity\" to 1 decimal place.) declared and paid cash per Share Return on E

Solution

1. EPS = Net income / Average number of Outstanding shares = $4560 / 57000 = $0.08 per share

1. ROE = Net Income / Average Stock Equity = $4560 / $114000 = 4.00%

2. EPS = Net Income / Number of Outstanding shares = $4560 / (57000 - 10700) = 0.10 per share

2. ROE = Net Income / Stock Equity = $4560 / ($114000 - (10700 * $2))= 4.92%