At December 31, 2017, Reid Company had 600,000 sharesof common stock issued and outstanding, 400,000 of whichhad been issued and outstanding throughout the year and200,000 of which were issued on October 1, 2017. Netincome for 2017 was $2,000,000, and dividends declared onpreferred stock were $400,000. Compute Reid’s earningsper common share. (Round to the nearest penny.)

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.