M&M Proposition 2: What Is the Net Income of Banana

question 43

Multiple Choice

M&M Proposition 2: What is the net income of Banana without and with the debt?

• A) $500 and $484.2
• B) $484.2 and $500
• C) $500 and $465
• D) $490 and $500

---

Definitions:

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenues.

Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders, not considered when calculating earnings per share or dividend distributions.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company's profits and a right to vote on shareholder matters.