Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Athar Company EPS = $0.50 Wagdy Company EPS = $2.00 Net income = $1,000,000 Avg. # of CShares OS 2,000,000 Net income = $1,000,000 Avg.

Athar Company EPS = $0.50

Wagdy Company EPS = $2.00

Net income = $1,000,000

Avg. # of CShares OS 2,000,000

Net income = $1,000,000

Avg. # of CShares OS 500,000

Refer to the EPS information immediately above. Even though Wagdy Company reports __________ EPS, both companies have the same net income. A company with greater EPS __________ indicate greater profitability.
  • A. greater; does
  • B. greater; does not
  • C. lower; does
  • D. lower; does not

If Athar Company buys back 1 million shares of common stock, then treasury stock would increase, common shares outstanding would ___________, and EPS would change to ______ per share.

A. increase; $0.33

  • B. increase; $1
  • C. increase; $2
  • D. decrease; $0.33
  • E. decrease; $1
  • F. decrease; $2

An increase in EPS would look _________ to shareholders because their proportionate ownership interest is _______________.

A. good; increased

  • B. good; decreased
  • C. bad; increased
  • D. bad; decreased

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

IT And European Bank Performance

Authors: E. Beccalli

1st Edition

0230006949, 9780230006942

More Books

Students also viewed these Accounting questions

Question

Describe employee assistance programs.

Answered: 1 week ago

Question

Describe the importance of physical fitness programs.

Answered: 1 week ago

Question

Discuss the factors that set the stage for global HR practice.

Answered: 1 week ago