Big Apple Cabins Has Net Income of $725,000

question 57

Multiple Choice

Big Apple Cabins has net income of $725,000.Throughout the year,the company had 150,000 shares of common stock outstanding.Also,the company has 25,000 shares of preferred stock that pay a dividend of $5.00 per share that is convertible into 5 shares of common stock for each share of preferred.The preferred stock is considered to be dilutive.The tax rate for Big Apple Cabins is 40%.What are the basic earnings per share for Big Apple Cabins?

• A)$2.50
• B)$2.71
• C)$2.86
• D)$3.64
• E)$4.00

Understand the concepts of real and nominal interest rates and the Fisher effect.

Analyze the factors influencing the yield to maturity and effective annual rate of bonds.

Recognize the advantages and disadvantages of various bond provisions for issuers and investors.

Understand the principles and practices of the Kanban system and its applications in different settings.

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Definitions:

Retained Earnings

The portion of net income not distributed to shareholders but instead reinvested in the business or used to pay off debt.

Common Equity

Represents the stockholders' equity or the amount available to common shareholders as a portion of the net worth of a company.

Capital Structure

The mixture of debt and equity financing that a company uses to fund its operations and growth.

Coupon Rate

The interest rate promised to be paid by the issuer of a bond to the bondholder on the face value of the bond.