George Manufacturing Had Net Income of $200,000 and Declared Preferred

question 96

Multiple Choice

George Manufacturing had net income of $200,000 and declared preferred dividends of $25,000 during the current year.George began the year with 20,000 common shares outstanding.It issued 30,000 shares on June 30 and repurchased 6,000 of the newly issued shares on November 1.Compute George's weighted-average common shares outstanding for the year.

• A)22,000
• B)34,000
• C)44,000
• D)50,000

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Definitions:

Allocative Efficiency

A state of the economy in which resources are allocated in a way that maximizes the overall benefit to society, where the marginal costs of production are equal to the marginal benefits for all goods and services.

Producer Surplus

The difference between the amount producers are willing to supply a good for and the amount they actually receive.

Consumer Surplus

The difference between the total amount that consumers are willing to pay for a good or service and the total amount they actually pay.

Marginal Benefit

This is the additional benefit received from the consumption of one more unit of a good or service.