1. a) Earnings per share will increase if the number of ordinary shares issued decreases while net income and preferred dividends remains the same.

Select one:

- true or false?

1.b) Match each of the following descriptions with the right term:

- The amount of money that could be allocated to each share if the company paid out all its earnings. TERM?

- The amount of money paid out to shareholders for each share held TERM?

.- The percentage of profit per share paid out to shareholders TERM?

- The portion of return on investment attributable to dividends TERM?

1.c) Gary's goods recorded a net profit of 250,000 Pounds in their income statement for the current financial year. They have 5000 ordinary shares in issue. They paid out 15,000 in dividends to preference shareholders, and declared an ordinary share dividend of 30,000 Pounds during the year. Ordinary shares in Gary's Goods are trading at a market price of 80 Pounds per share, while preference shares are trading at a price of 40 Pounds per share. What is the price earnings ratio for Gary's Goods for the financial year? Select one:

a) 1.82

b) 0,85

c) 1.6

d) 1.7