On January 1, 2014, Pennington Corporation purchased 30% of the common shares of Edwards Company for $560,000. During the year, Edwards earned a net income of $224,000 and paid dividends of $56,000.
Prepare the entries for Pennington to record the purchase and any additional entries related to this investment in Edwards Company in 2014.
The CCC (triple C) Venture has issued convertible preferred stock to its venture investors. Each share of preferred stock is convertible into 0.80 shares of common stock and pays an annual cash dividend of $0.25.
If each share of preferred stock has a market value of $4, what is the minimum price that a share of the CCC Venture’s common stock should be selling for (ignore the dividend yield on the preferred stock)?
During the fiscal year ended September 30, 2017, Happster Co. had a 5-for-1 stock split. In its annual report for 2017, the company reported earnings per share for the year ended September 30, 2016, on a restated basis, of $0.85.
Calculate the originally reported earnings per share by Happster Co. for the year ended September 30, 2016.
Financial information for Retro Designs includes the following selected data:
| Net income (in millions) | $175 |
| Preferred stock (in millions) | $25 |
| Common shares outstanding (in millions) | 250 |
| Stock price | $10.00 |
What is the company’s price-earnings ratio?
A. 14.3
B. 16.7
C. 5.7
D. 15.0
