Answer:
$0.26
Explanation:
diluted earnings per share (EPS) = (net income - preferred dividends) / (weighted average outstanding shares + diluted shares)
net income = $330,000
preferred dividends = 2,000 x $500 x 8% = $80,000. Since the preferred stocks are convertible, they will be considered diluted shares. Therefore, no preferred dividends will be included in the calculation.
weighted average outstanding shares:
- January 1 = 700,000 x 12/12 = 700,000
- March 1 = 200,000 x 10/12 = 166,666.7
- total weighted average = 866,666.7
diluted shares = 2,000 preferred stocks x 200 = 400,000
diluted EPS = $330,000 / (866,666.7 + 400,000) = $0.260526247 ≈ $0.26
Answer: The rate of return on common stockholder’s equity is 23%.
Explanation:
Given that,
Net Income = $50,000
Preferred Dividends = 8,000
Average Common Stockholder’s Equity = 180,000
Average number of Common Shares Outstanding = 250,000 shares
Market Price = $2 per share
Therefore,
Return on equity = 
= 
= 23%
Answer:
Of course a sales agent can be involved, although they will probably charge a fixed amount and not a sales percentage. Many people probably need the help of a sales agent to fill out legal forms, including contracts, etc. Not everyone has the knowledge to prepare them or simply fill them out, and a sales agent can be helpful.
