The Company Has 14 Million Common Shares Outstanding for Market

question 40

Multiple Choice

The company has 14 million common shares outstanding for market price of $18.90 each. It has 3 million preferred shares outstanding at market price of $12 on which a dividend of $1.50 was paid out. If the company has a Price/Earnings ratio of 12, what after-tax net income did the company earn?

• A) $2,646,000
• B) $2,601,000
• C) $17,550,000
• D) $22,050,000
• E) $26,550,000

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Definitions:

Law of Reason

A principle suggesting that the laws governing human conduct should be based on logic, ethics, and rationality rather than on arbitrary dictums or supernatural beliefs.

Hypothetical Imperative

A command or rule that applies conditionally, suggesting action is necessary to achieve a particular end or goal, as opposed to moral absolutes.

Rational Agents

Entities that make decisions by logically assessing options and outcomes to maximize their own benefit.