Butterfield's Is an All-Equity Firm with 132,000 Shares of Stock

question 54

Multiple Choice

Butterfield's is an all-equity firm with 132,000 shares of stock outstanding.The book value per share is $14,and the market value per share is $31.The current net income is $301,000.The firm is considering a new project that will cost $1.4 million and increase net income by $87,000.The current earnings per share is ________ and it will be ________ if the project is accepted.

• A)$2.24;$2.12
• B)$2.24;$2.08
• C)$2.24;$2.21
• D)$2.28;$2.19
• E)$2.28;$2.11

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Definitions:

Financial Information

Data regarding the financial status of an entity, including assets, liabilities, revenues, expenses, and equity, among other financial metrics.

Verifiable

The ability to be tested and proven to be true or accurate, often through the provision of evidence or demonstration.

Consistent

Referring to a principle in accounting that requires the same accounting methods to be applied in the financial statements period over period.

Neutral

A position or stance that does not favor either side in a dispute, competition, or selection.