At January 1, 2008, Langley Company’s outstanding shares included the following.
280,000 shares of $50 par value, 7% cumulative preferred stock.
900,000 shares of $1 par value common stock.
Net income for 2008 was $2,530,000. No cash dividends were declared or paid during 2008. On February 15, 2009, however, all preferred dividends in arrears were paid, together with a 5% stock dividend on common shares. There were no dividends in arrears prior to 2008.
On April 1, 2008, 450,000 shares of common stock were sold for $10 per share, and on October 1, 2008, 110,000 shares of common stock were purchased for $20 per share and held as treasury stock.
Compute earnings per share for 2008. Assume that financial statements for 2008 were issued in March 2009.
