The following information is available for Bradshaw Corporation and Newell Corpo
ID: 2337519 • Letter: T
Question
The following information is available for Bradshaw Corporation and Newell Corporation: Bradshaw Corporation Newell Corporation (in millions) 2017 25 500 200 180 2016 10 480 180 150 2016 30 520 200 220 2017 Preferred dividends Net income Shares outstanding at the end of the year Shares outstanding at the beginning at the year 490 150 200 Based on this information, which of the following is suggested by the earnings per share calculations (rounded to two decimals) and the information given? O There is higher performance in 2016 than in 2017 for Newell Corporation. O There are fewer earnings available to Newell's common stockholders in 2017 than in 2016. 0 There is a decrease in preferred shares of stock in 2017 as compared with 2016. 0 There is lower performance in 2016 than in 2017 for Newell Corporation. Click if you would like to Show Work for this question: Qpen Show WorkExplanation / Answer
Earning per share (EPS) are the net earnings of the company per share. EPS is calculated by dividing net income of the company with the number of common stock outstanding at the end of the year. Preferred dividends are subtracted from net income for the purpose of calculating EPS.
As per above calculation, the EPS of newell Corporation is 3.27 per share in 2017 as compared to 2.45 in 2016. This shows that there is lower performance in 2016 than in 2017 for Newell Corporation. We can say so, because, Growth in EPS shows how much money company is making for its shareholders, which is important measure of company's performance.
bradshaw corporation newell corporation 2017 2016 2017 2016 Net Income 500 480 490 520 Less: Preferred Dividend 25 10 0 30 Net Income after preferred dividend 475 470 490 490 Shares Outstanding at the end of the year 200 180 150 200 EPS 2.38 2.61 3.27 2.45Related Questions
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