Finning International Inc., headquartered in Edmonton, describes itself as “the world’s largest Caterpillar equipment dealer,” with operations in Western Canada, South America, the United Kingdom, and Ireland.

As at December 31, 2016, the company had a straightforward share capital structure, described in Note 7 to the financial statements as:

The Company is authorized to issue an unlimited number of preferred shares without par value, of which 4.4 million are designated as cumulative redeemable preferred shares. The Company had no preferred shares outstanding for the years ended December 31, 2016 and 2015. The Company is authorized to issue an unlimited number of common shares. Exhibit 11.14 contains Finning International Inc.’s 2016 consolidated statement of shareholders’ equity. All amounts are in thousands.

EXHIBIT 11.14 Excerpt from Finning International Inc.’s 2016 Annual Report

Required

a. Finning has an unlimited number of authorized shares on each class of shares. Why do many companies today prefer to have an unlimited authorized number of shares?

b. How many common shares were outstanding on December 31, 2016? What was the average issue value of those shares?

c. What was Finning’s reported net income for 2016? How much did it pay out in dividends? What was its dividend payout ratio?

d. Using only the statement of shareholders’ equity, calculate the return on equity for Finning for 2016 and 2015.

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Accumulated Other Comprehensive Income (Loss) Share Capital Foreign Currency Translation and Gain (Loss) on Gain (Loss) on Net (Canadian $ millions, except number of shares) Number of Contributed Investment Cash Flow Retained Earnings Shares Surplus Hedges Hedges Total Amount $ 39 Balance, January 1, 2015 172,370,255 $583 $114 $(13) $1,408 $2,131 Net loss (161) (161) Other comprehensive income 213 3 62 278 Total comprehensive income (loss) (99) 213 3 117 Issued on exercise of share options 44,343 Share option expense Repurchase of common shares (4,383,170) (14) (46) (31) (91) Dividends on common shares (124) (124) Adjustment for change in accounting policy (Note 18a) 9. 9. $ (1) Balance, December 31, 2015 $570 $327 $1,154 $2,050 168,031,428 Net income 65 65 (84) (13) Other comprehensive (loss) income (96) 1. Total comprehensive (loss) income (84) (31) 52 Issued on exercise of share options 135,774 (3) Share option expense Dividends on common shares (123) (123) $243 Balance, December 31, 2016 $573 $1,083 $1,901 168,167,202 %24 %24