George Manufacturing Had Net Income of $275,000 and Declared Preferred

question 90

Multiple Choice

George Manufacturing had net income of $275,000 and declared preferred dividends of $20,000 during the current year. George began the year with 16,000 common shares outstanding. It issued 60,000 shares on June 30 and repurchased 12,000 of the newly issued shares on November 1. Compute George's weighted-average common shares outstanding for the year.

• A) 64,000
• B) 44,000
• C) 74,000
• D) 76,000

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Definitions:

Natural Monopoly

An industry in which economies of scale are so great that a single firm can produce the industry’s product at a lower average total cost than would be possible if more than one firm produced the product.

Horizontal Market

A market that appeals to a wide range of consumers across different industries or sectors.

Contestable Market

A market with no barriers to entry or exit, where a company's prices and output are constrained by the threat of new entrants or competition rather than by existing competitors alone.

Public Interest Theory

A theory suggesting that regulations are created in response to the public's demand for fair and efficient markets.