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oksian1 [2.3K]
2 years ago
14

Common stock, $1 par value Shares outstanding, 1/1/2021 60,000 2-for-1 stock split, 4/1/2021 Shares issued, 7/1/2021 30,000 Pref

erred stock, $10 par value, 6% cumulative Shares outstanding, 1/1/2021 12,000 How many shares should Tb use to calculate 2021 basic earnings per share?
Business
2 answers:
Nuetrik [128]2 years ago
6 0

Answer:

75,000 shares

Explanation:

earnings per share (EPS) = (net income - preferred dividends) / weighted average shares outstanding

  • net income = ???
  • preferred dividends = $10 x 6% x 12,000 = $7,200
  • weighted average shares outstanding = [60,000 + (120,000 x 9/12)] / 2 = (60,000 + 90,000) / 2 = 75,000 shares

Since the shares split to 120,000 on April, their relative weight at the end of the year is 9/12 x 120,000 = 90,000. That is why the average shares = (beginning number of outstanding shares + ending number of outstanding shares) / 2 = 75,000

Ganezh [65]2 years ago
6 0

Answer:

120,000 shares

Explanation:

We will use weighted average numbers of outstanding shares.

Outstanding numbers of shares are those share which are issued in the market by the company and still being traded in the market. Treasury stock is excluded from the total issued share to calculate the total outstanding numbers of share.

Stock split increase the numbers of shares with a specific given ratio but the common equity value remains same that's why the par value of the share decreases with respective ratio.

4/1/2021

Shares after stock split

Outstanding numbers of shares = 60,000 shares x 2 / 1 = 120,000

7/1/2021

Shares after issuance

Outstanding numbers of shares = 120,000 shares + 30,000 shares = 150,000 shares

Now calculate the weighted average numbers of shares

1/1/2021-3/31/2021     60,000 x 3/12 = 15,000

4/1/2021-6/30/2021   120,000 x 3/12 = 30,000

7/1/2021-12/31/2021   150,000 x 6/12 = <u>75,000</u>

Weighted average outstanding shares <u>120,000</u>  

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Explanation:

Remember the supply curve shows the relationship between the amount of a commodity that a producer (or orange farmer) is <em>willing </em>to offer and at a particular price at any given time.

Because of the subsidies to orange farmers we expect the price of orange to become lesser in the future. Therefore the rightward shift occurs in supply curve for oranges due to favorable changes such as the new legislation which may lead to:

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Answer and Explanation:

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Domestic telecommunication companies in the United States are struggling due to foreign competition. How can the US government h
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A. The government should implement subsidies as they would help domestic businesses be able to afford to lower the prices of their goods and thus become more competitive.

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The government adoption of subsidies in order to support domestic telecommunication is the most effective solution in the long run. Domestic firms will be able to compete with lower prices as the cost and expenses structure would have a lighter burden over revenue.

4 0
3 years ago
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A company forecasts free cash flow in next year to be $20 million, $25 million in second year, and 30 million in third year. Aft
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Answer:

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Current value from operations = $534.71 million

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