Big Apple Cabins Has Net Income of $725,000

question 11

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 diluted earnings per share for Big Apple Cabins?

• A)$2.00
• B)$2.25
• C)$2.50
• D)$2.64
• E)$4.00

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Definitions:

Fundamental Attribution Error

The overestimation of internal factors and underestimation of external factors driving individual behaviour.

Representativeness Bias

Basing a decision on similarity to other situations.

Facilitator

An individual who makes an action or process easier or assists in the progress of discussions and processes within a group.

Supervisor

An individual who oversees and manages the work of others, typically in a professional or work setting.