Returned earning per share EPS refers to the portion of net income which is

Returned earning per share eps refers to the portion

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Returned earning per share (EPS) “refers to the portion of net income which is retainedby the company rather than distributed to its owners as dividends. This is calculated by dividingretained earningsby the total number of shares outstanding.” (Stockopedia, 2019). The EPS is$7.12 and was calculated by dividing (12,505,417.87-50,000) by 1,750,000. When a companyhas a high EPS the shareholders are more willing to invest because their return on equity will behigher. To increase Peyton Approved earnings per share the company needs to increase their netincome. By doing this the company will be able to entice new investors and shareholders whileincreasing equity and profits.Issuing preferred stock or debt can impact how the company determines their changes toequity structure. Since preferred stockis equity it is recorded as a credit on the balance sheet inthe shareholder's equity column rather than thedebtcolumn.Shareholders are also more open topreferred stockbecause it has a fixed dividend rate offering more financial security. Shareholders
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3-1 Final Project Milestone One: Management Brief4who have preferred stock do not receive a vote regarding company decisions, however they arepaid out dividends. It the stockholder were to hold common stock instead then they wouldreceive a vote but would only receive dividends based on how profitable the company is. Since the company uses MACRS depreciation for their tax return it caused them to be$209,301 higher than book value which has impacted Peyton Approved’s bottom line. SincePeyton Approved has been a C Corp since the beginning of these changes the new taximplications will not affect the company negatively. The company provides for taxes at 25% of
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