B Chapter 9 - amount of preferred stock dividends before...

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B Chapter 9 Sources of Capital: Owners’ Equity Forms of Business Organization : Sole Proprietorship Partnership Corporation Ownership of Corporation : Preferred Stock Common Stock Both may have a par or no par, additional- paid-in-capital Issuance of Common Stock Treasury Stock
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Retained Earnings Dividends Stock Split Warrants and Stock Options Employee Stock Ownership Plan EPS-PP. 254-256 Equity in Nonprofit Endowments and funds To compare incorporated and  unincorporated firms, you must impute a  salary for employee-owners of the  unincorporated firm. 
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Problem 9-1: Difference between the two  ratios is the amount of “leverage” in a firm’s  capital structure.  Problem 9-2: in the numerator subtract the 
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Unformatted text preview: amount of preferred stock dividends before you calculate the EPS. The reason is that EPs is Earnings Per Common Share. In part b, you must take the net change in the number of shares for outstanding shares. Problem 9-4: Johns amount will be 47000. Case: Exhibit A, return on common for proposal B = (.1%), operating income of 100000. Under operating income of 300000, Proposal A will have a return on common of 24.2%. In Exhibit B, operating income of 300000 Proposal C, pretax ROI is 12.9%. In exhibit C, pessimistic under D for both is 4.7 and 5.5 percent respectively....
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