The competitive moves and business approaches a company's management is using to grow the business, compete successfully, attrac
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Answer:
Earnings Per Share (EPS) = $1.18
Explanation:
We know,
Earnings Per Share (EPS) =
Here,
Net Income = $2,500,000
Preferred Dividend = Total preferred stock in dollar x cost of preferred stock
Preferred Dividend = $5,000,000 x 8% = $400,000
No. of shares outstanding table is shown below (Weighted):
Shares outstanding + Additional shares - Treasury stock =
[750,000 x stock split] + [300,000 x (8/12) x stock split] - [150,000 x (5/12) x stock split]
= (750,000 x 2) + (200,000 x 2) - (62,500 x 2)
= 1,500,000 + 400,000 - 125,000
= 1,775,000
Now, EPS =
EPS = 1.18 (rounded to 2 decimal places)
<em>Note:</em> 1. As, there is a stock split of 2-for-1, that's why we multiply the stock by 2.
2. Since additional shares are issued on 1st May, therefore, the weight from May to December is for 8 months. Repurchased or Treasury stock should be removed from number of shares.
When the initial cost of Machine A is $6,000 and that of Machine B is $8,500, then both the machines will have the same current value at the end of 10 years.
<h3>What is the meaning of current value?</h3>The present market value of an asset that prevails in the market is known as the current value of an asset. Using the given conditions, the current value will be the same as computed under,
Putting the given value and solving further we get,
Hence, the significance of current value is aforementioned.
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