A Company with 20 Million Shares Earns $1

question 69

Multiple Choice

A company with 20 million shares earns $1.6 million one year and loses $2.6 million the next year. Find the per-share income for two years.

• A) $0.05 million
• B) $1 million
• C) -$0.05 million
• D) -$1 million

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Definitions:

Positive NPV Projects

Investment opportunities where the net present value (NPV) is greater than zero, indicating that they are expected to generate a profit.

High Dividend Payout

The practice of distributing a large portion of a company's earnings to its shareholders in the form of dividends.

Distribution

The process of allocating assets, earnings, or dividends among shareholders, or the spread of investments within a portfolio.

Corporate Dividend Payout

The portion of earnings distributed to shareholders in the form of dividends.