Maxwell Communications Corporation Has After-Tax Earnings of $1,508,000 After Paying

question 259

Multiple Choice

Maxwell Communications Corporation has after-tax earnings of $1,508,000 after paying $45,000 in dividends to its 10,000 preferred stockholders.If Maxwell has 500,000 common stockholders,its earnings per share are

• A)$4.50.
• B)$4.00
• C)$3.05.
• D)$3.02.

---

Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource.

Average Product

Output per unit of a particular input.

Perfect Competitor

An idealized firm that has no market power and operates in a market with many buyers and sellers where all have perfect information.

Income Effect

It refers to the change in an individual's or economy's income and how that change will affect the quantity demanded of a good or service.