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Gre4nikov [31]
3 years ago
13

Western Company has net income of $100 million in 2018. If net income in 2019 is $175 million or more, executives will receive 2

million additional shares of common stock. How does this effect the calculation of diluted EPS?
Business
1 answer:
djverab [1.8K]3 years ago
7 0

Answer:

Diluted earnings per share (EPS) measures how EPS would be affected if all convertible securities are turned into common stock. As more convertible securities are turned into common stock, the EPS dilutes or decreases since net income must be divided by a larger amount of stocks.

In this case we are not told how many outstanding common stocks exist, but whatever the number, e.g. 50 million, the effect of the 2 million additional stocks given to the company's executives will reduce the EPS of all the outstanding common stocks. Current EPS = $175 million / 50 million = $3.50 per stock. With 2 million more common stocks, EPS = $175 million / 52 million = $3.37 per stock.

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The U.S. Securities and Exchange Commission periodically charges individuals with insider trading and claims those individuals h
Delicious77 [7]

Answer:

The correct answer is option d.

Explanation:

The effficent market hypothesis is an investment theory which advocates that the stock prices reflect all the available information. As a result, stocks are always traded at their fair value.

The strong form of efficient market says that stock prices reflect all information whether public or private.

This implies that investors cannot have more than normal profits. In the above example, the investors are able to make profit through insider information. This means that the market is less than strong form efficient.

6 0
3 years ago
Dean, the president of Billing & Credit Company, promises to pay his employee Ewing, who is dangerously obese, $10 for every
Aliun [14]

Answer:

See the explanation below.

Explanation:

The court likely to rule in favor of Ewing.

The reason is that the enough consideration that gives backing to a promise in this case is generally the waiver of a legal right to eat to obesity as requested by the other party.

The evidence that Ewing has lost 154 pounds in weight over the stipulated period is a consideration that sufficient enough under the law. The payment of $10 pound that Ewing has lost is a promise. The fact that Ewing also benefit from the weight loss does not matter.

4 0
3 years ago
What will increase the current value of a stock?
GrogVix [38]
Increase in capital gains yield
8 0
3 years ago
Sales of Schwinn's apartment-sized exercise machine have experienced a steady climb; however, the profits have been negative. Th
Alchen [17]

Answer:

<em>The Schwinn exercise machine is most likely in the</em> <u>introduction</u><em> stage of the product life cycle.</em>

Explanation:

The life cycle of a product is characterized by the phases:

1- introduction,

2- growth,

3- maturity

4- decline.

The first step is the introduction, which characterizes the product's insertion in the market, and includes business efforts to make consumers aware of the product. This phase has as its main characteristics the <u>low volume of production and sales.</u>

8 0
3 years ago
The budget director for Kanosh Cleaning Services prepared the following list of expected selling and administrative expenses. Al
Svet_ta [14]

Answer:

Explanation:

c. Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter.

The answer is 5400 because "at the end of the 4th quarter is only consists of 3 months (oct-dec). By taking the total amount you paid for all 6 months minus what you have to pay for 3 months.

3 0
3 years ago
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