Answer:
What factors other than earnings per share should be considered in evaluating alternative financing plans?
-
b.Dividends reduce retained earnings.
Explanation:
Only option B is true, since retained earnings = previous balance + net income - dividends.
- Option A is wrong because preferred stocks collect annual interests or preferred dividends.
- Option C is wrong because common stockholders exercise control over the board of directors.
- Option D is wrong because it is not necessary to pay dividends to common stockholders.
- Option E is wrong because dividend expense reduces retained earnings, not net income.
<span>If the interest rate is 10%, the factor for the future value of annuity due of 1 for n = 5, i = 10% is equal to the factor for the future value of an ordinary annuity of 1 for n = 5, i = 10%
</span><span>multiplied by 1.10.</span>
Answer:
Ornaments, Inc.
In a recession, the EPS is $2.13 per share.
Explanation:
a) Data and Calculations:
Normal Recession Boom
EBIT $73,000 $65,700 (10% lower) $87,600 (20% higher)
Taxes (40%) 29,200 26,280 35,040
Net income $43,800 $39,420 $52,560
EPS = $2.37 $2.13 $2.84
= Net Income/18,500 or (EBIT -(1 - 40%))/Outstanding shares
EPS = Earnings per share. It is computed by dividing the net income by the number of outstanding shares. It indicates how much dollars Ornaments, Inc. makes for each share held by a common stockholder.
Answer:
A market economy is an economy that is primarly based on free markets, where consumers and producers meet to buy and sell goods and services, and prices are set according to the forces of supply and demand.
A Soviet-style communist economy, is also known as a planned economy or command economy. This is an economy where private property does not exist, the government owns all property, and plans the economy with years of anticipation. Prices are set by the government, as well as the quantities of goods and services that are produced and delivered.
The problem with planned economies is that it becomes too difficult for the government to coordinate economic activity. The government lacks a lot of vital information, and ends up assigning resources to activities that are not efficient. These economies also lack proper prices, which are the signals that coordinate economic activity.
For that reason, the market economies prevailed over the planned economies, they were simply more efficient: better at producing more goods and services, at cheaper prices, and using less resources.
The herfindahl-hirschman index is calculated by summing the square of each company's market share.
In this case, the two firms separately would account for 628 of the herfindahl-hirschman index (12*12+22*22)
If the firms merge, they would account for 1,156 of the herfindahl-hirschman index (34*34)
This is an increase of 528 meaning the market is more concentrated.