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sesenic [268]
3 years ago
14

During 2021, Farewell Inc. had 504,000 shares of common stock and 52,000 shares of 5% cumulative preferred stock outstanding. Th

e preferred stock has a par value of $100 per share. Farewell did not declare or pay any dividends during 2021. Farewell's net income for the year ended December 31, 2021, was $2.9 million. The income tax rate is 20%. Farewell granted 14,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common stock at an exercise price of $33 per share. The options vest after one year. The market price of the common stock averaged $34 per share during 2021. What is Farewell's diluted earnings per share for 2021, rounded to the nearest cent
Business
1 answer:
alexandr402 [8]3 years ago
7 0

Answer:

The correct answer is $5.15.

Explanation:

Preference Dividend = Shares × Par Value Of Per Share × Cumulative Rate%

= 52,000 × $100 × 5%

= $260,000

Common Shares Equivalent From Stock Option = 1 ÷ Market Price Of Common Stock Average Per Share × Farewell Granted Stock On Jan.1 × Right To Buy Share

= 1 ÷ $34 × 14,000 × 20

= 8,235.29

Calculation Farewell Diluted Earning Per Share= Net Income - Preference Dividend ÷ (Common Shares Equivalent From Stock Option+Common Shares)

=2,900,000-260,000 ÷ ($8,235.29 + 504,000)

=2,640,000 ÷ 512,235.29

= $5.15

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Although Scott, an African American, was more qualified than Bernardo, a Hispanic American, Bernardo was hired instead of Scott
goblinko [34]

Answer:

B. Discrimination

Explanation:

Discrimination refers to the act of unfair judgement on a specific group of people based on characteristics such as age, gender, race, religion, country or even sexual orientation. It involves discriminating (treating a person unfairly) against a person because of the characteristics he or she possesses. In this case, Scott was discriminated against because he's an African American and believed by the employer not to be hardworking because of his race.

7 0
3 years ago
Which situation best illustrates the effects of inflation?
NNADVOKAT [17]

Answer:

B. A type of shirt that sold for $10 in 2000 costs $15 in 2020  

Explanation:

Inflation is a measure of the rate of rising prices of goods and services in an economy.

3 0
3 years ago
Distinguish between the features and benefits of getting a student loan and getting a grant or a scholarship.
Yuliya22 [10]

Student Loan:

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  • part of credit history

Grant or Scholarship

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The major difference between loans and scholarships is that loans will have to be repaid and scholarships do not.

5 0
3 years ago
Read 2 more answers
The Wheat Company has used the LIFO method for inventory valuation since the start of business 15 years ago. The current year en
yulyashka [42]

Answer:

Explanation:

Question 27

If Wheat Company had used the FIFO inventory method, income before income taxes would have been $75,000 higher in the current year. As inventory is an asset to the company. Therefore the $75,000 in inventory would have increased the company's asset and increasing the income before taxes.

Question 28

Other things held constant, which of the following will NOT affect the current ratio, assuming an initial Not yet current ratio greater than 1.0?

C. Accounts receivable are collected in cash.

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It is calculated as Current Asset/ Current Liability. A ratio of 1 and above is the best meaning that a company an manage its debts obligations well.

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3 years ago
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A company produces very unusual CD's for which the variable cost is $ 17 per CD and the fixed costs are $ 30000. They will sell
Alika [10]

Answer:

Explanation:

Let we assume the number of CD produced be X

So, the total cost would be

C = Fixed cost + variable cost × number of CD produced

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For total revenue, it would b

R = $63X

For total profit, it would be

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= $63X - $17X - $30,000

= $46X - $30,000

For number of CD, it would be

0 = $46X - $30,000

X = $30,000 ÷ $46

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4 0
3 years ago
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