Parnaby Has 25,000 Common Stock Shares Outstanding and Its 100%-Owned

question 4

Multiple Choice

Parnaby has 25,000 common stock shares outstanding and its 100%-owned subsidiary Sandal has 5,000 common stock shares outstanding.Parnaby and Sandal do not have any potentially dilutive securities outstanding.The separate net incomes for Parnaby and Sandal are $150,000 and $75,000,respectively.Diluted EPS for the consolidated company is

• A)$5.00.
• B)$6.00.
• C)$7.50.
• D)$9.00.

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Definitions:

Transitive Preferences

A principle in economics that if an individual prefers option A over option B and prefers option B over option C, then they will prefer option A over option C.

Intelligence

The ability to acquire, understand, apply knowledge, and solve complex problems, often seen as a combination of cognitive functions.

Looks

In economics, "looks" can refer to physical appearance influencing economic outcomes, although it's not a standard economic term.

Indifference Curves

A graphical representation showing combinations of goods or services among which a consumer is indifferent, depicting equal levels of satisfaction.