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Microsoft corp. reported earnings per share of $1.50 in 2006 and $2.40 in 2016. at what annual rate did earnings per share grow over this period?

Respuesta :

Earnings per share increased by 9% per year during this time period.

What are earnings per share?

  • Earnings per percentage are calculated by dividing a company's income by the extremely good stocks of its common inventory.
  • The resulting range is a symbol of a company's profitability.
  • It's far typical for a company to document EPS that has been adjusted for exceptional items and potential proportion dilution.
  • Profits as a percentage are one of the most commonly used ratios in the business world.
  • This range indicates how much a company earns in income for each brilliant percentage of inventory.
  • EPS is calculated by dividing a company's net earnings by the total number of outstanding stocks.
  • EPS is heavily influenced by the company and market expectations of how well that company will perform.
  • As a general rule, the higher a company, the more valuable it is likely to be, though higher isn't always a guarantee of future overall performance.

To find earnings per share:

  • Total growth = $2.40 - $ 1.50 = $0.90
  • time for the given growth = 10 years
  • percentage of annual growth = (0.90 / 10) × 100 = 9
  • = 9%

Therefore, earnings per share increased by 9% per year during this time period.

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