During Its Fiscal Year,Deerborn Distributing Had Net Income of $100,000

question 74

Multiple Choice

During its fiscal year,Deerborn Distributing had net income of $100,000 (no extraordinary items) and 50,000 shares of common stock and 10,000 shares of preferred stock outstanding.Deerborn declared and paid dividends of $.50 per share to common and $6.00 per share to preferred.The preferred stock is convertible into common stock on a share-for-share basis.For the year,Deerborn Distributing should report diluted earnings (loss) per share of

• A) $(0.80).
• B) $1.00.
• C) $1.67.
• D) $2.67.

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Definitions:

Company Stock

Equity securities issued by a corporation, representing ownership interests in the company.

Prefiling Period

In securities registration, the period that begins when an issuer starts to think about issuing securities and ends when the issuer files the registration statement and prospectus with the SEC.

Issuer

An entity that issues and is responsible for a financial instrument.

Registration Statement

A set of documents filed with the Securities and Exchange Commission that contains information about a company's financial status, operations, and plans for an initial public offering (IPO).