21) Albatross Shipping had 100,000 shares of common stock outstanding on January 1. On September 1, Albatross issued an additional 30,000 common shares. Albatross has no treasury stock. If its net income was $12,650 for the year, its earnings per share for the year was ________, rounded to the nearest cent.
A) $0.13
B) $0.10
C) $0.11
D) $0.12
22) Which of the following will increase a company’s earnings per share for the year?
A) issuing additional shares of stock during the year
B) buying additional shares of treasury stock during the year
C) issuing a stock dividend to shareholders
D) selling all the stock it held as treasury stock at the beginning of the year
23) Return on equity is a measure of how well a company produces income with the amount of investment the common shareholders have made in the company.
24) Return on equity is calculated by dividing total shareholders’ equity by the total amount of income earned for an accounting period.
25) Diluted earnings per share is calculated as if all outstanding securities that could be converted into common stock actually were converted.
26) When a company issues additional shares of stock during the year, its earnings per share will most likely decrease.
27) When a company issues additional shares of stock during the year, its earnings per share will most likely increase.
28) When a company buys additional shares of treasury stock during a year when it does not issue any additional shares of common stock, its earnings per share will most likely increase.
29) When a company sells all of its existing shares of treasury stock during the year, its earnings per share will most likely increase.