Information from the Financial Statements Is Provided in the Following

question 88

Multiple Choice

Information from the financial statements is provided in the following table:
$\begin{array}{lrr}&\text { Year } 2&\text { Year } 1\\\text { Net income } & \$ 150,000 & \$ 120,000 \\\text { Cash dividends paid on preferred shares } & 15,000 & 15,000 \\\text { Cash dividends paid on common shares } & 42,000 & 38,000 \\\text { Average number of preferred shares outstanding } & 20,000 & 20,000 \\\text { Average number of common shares outstanding } & 105,000 & 95,000 \\\text { Market price per share of common shares at year end } & 25.10 & 22.70\end{array}$
-Refer to the figure Randstad Inc.How much will earnings per share be reported as for Year 2?

• A) $1.08
• B) $1.20
• C) $1.29
• D) $1.43

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Definitions:

Expansionary Gap

A situation where the actual output in an economy exceeds the potential output due to high demand, often leading to inflationary pressures.

Short-Run Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a short time period, given the current level of prices.

Actual Unemployment

The current level of unemployment in the economy, reflecting the number of people who are actively seeking employment but are without jobs.

Natural Rate

The level of economic activity, particularly unemployment or interest rates, that corresponds to the economy's long-term equilibrium without short-term cyclical fluctuations.