On January 1, 2021, Warren Corporation had 1,000,000 shares of common stock outstanding. On March 1, the corporation issued 200,000 new shares to raise additional capital. On July 1, the corporation declared and issued a 2-for-1 stock split. On October 1, the corporation purchased on the market 600,000 of its own outstanding shares and retired them.
Instructions:
Compute the weighted average number of shares to be used in computing earnings per share for 2021.
Radon Homes’ current EPS is $7.02. It was $4.96 five years ago. The company pays out 35% of its earnings as dividends, and the stock sells for $33.
Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places.
Martha Lou owns 100 shares of Blain Corporation common stock. She purchased the stock on July 25, 1998, for $4,000. On May 2 of the current year, she receives a nontaxable distribution of 100 stock rights. Each stock right has a $10 FMV, and the FMV of the Blain common stock is $70 per share. With each stock right, Martha Lou may acquire one share of Blain common for $68 per share. Assume that she elects to allocate basis to the stock rights.
If she exercises the stock rights on May 14, what is the basis of the 100 shares purchased and when does the holding period start?
A firm had the following accounts and financial data for 2005: Sales revenue $3,060 Accounts receivable $500 Interest expense $126 Total operating expenses $600 Accounts payable $240 Cost of goods sold $1,800 Preferred stock dividends $18 Tax rate 40% Number of common shares outstanding 1,000 The firm’s earnings per share, rounded to the nearest cent, for 2005 was _____.
a. $0.5335
b. $0.5125
c. $0.3204
d. $0.3024
