Wernett Corporation's Net Income for the Most Recent Year Was

question 73

Multiple Choice

Wernett Corporation's net income for the most recent year was $1,509,000. A total of 200,000 shares of common stock and 100,000 shares of preferred stock were outstanding throughout the year. Dividends on common stock were $4.95 per share and dividends on preferred stock were $1.35 per share. The earnings per share of common stock is closest to:

• A) $1.92
• B) $7.55
• C) $6.87
• D) $2.60

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Definitions:

Innovative Securities

Financial instruments that have been newly created or structured in a novel way, often to meet specific investment or financing needs.

Mortgage Originators

Individuals or institutions that work with borrowers to complete mortgage transactions, originating loans.

Periodic Payments

Payments made or received regularly over a designated period of time, often found in loans or annuities.

Asset Substitution

The practice of replacing an asset in a portfolio with another asset, typically to manage risk or improve returns.