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PREFERRED+STOCK+INFLUENCE+ON+EPS+Homework+Solution

# PREFERRED+STOCK+INFLUENCE+ON+EPS+Homework+Solution -...

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PREFERRED STOCK INFLUENCE ON EPS Homework Solution Assumption (a) Assumption (b) Case Year Basic EPS Diluted EPS Basic EPS Diluted EPS 1 1 \$2.00 \$2.00 \$2.00 \$1.11 2 \$2.40 \$2.40 \$2.40 \$1.67 2 1 \$1.40 \$1.40 \$1.40 \$1.11 2 \$2.40 \$2.40 \$2.40 \$1.67 Calculations: Assumption (a) Assumption (b) Case Year Basic EPS Diluted EPS* Basic EPS Diluted EPS 1 1 \$20,000/10,000sh. \$20,000/10,000sh. \$20,000/18,000sh. 2 \$24,000/10,000sh. \$24,000/10,000sh.

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Unformatted text preview: \$30,000/18,000sh. 2 1 \$14,000/10,000sh. \$14,000/10,000sh. \$20,000/18000sh. 2 \$24,000/10,000sh. \$24,000/10,000sh. \$30,000/18,000sh. *Same as Basic EPS In Case 1 (non-cumulative) the earning adjustment is the amount of dividends declared, whereas, in Case 2 (cumulative) it is the preferred yearly stipulated dividend rate....
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