If Net Income Is $10,000 and There Were 8,000 Common

question 130

Multiple Choice

If net income is $10,000 and there were 8,000 common shares issued and outstanding the entire year,and $100,000 of noncumulative,nonconvertible 6% $100 par preferred shares outstanding the entire year,what is EPS if no dividends were declared during the year?

• A) $1.00
• B) $0.50
• C) $1.25
• D) $2.00

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Definitions:

Ethical Issue

A dilemma or circumstance that requires a person or organization to choose between alternatives that must be evaluated as right (ethical) or wrong (unethical).

Stakeholders

The individuals or groups that have an interest or stake in the outcome of an organization's actions, including employees, customers, suppliers, and investors.

Ethical Decision-Making

The act of assessing and deciding between different choices based on ethical guidelines.

Competing Firm

A company that is in rivalry with others offering similar products or services in the same market.