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Cook Company shows the following condensed income statement information for the year ended December 31, 2011:
Income before extraordinary gain
$30,000
Plus: Extraordinary gain, net of tax expense of $2,000
5,000
Net income
$35,000
The company declared dividends of $3,000 on preferred stock and $5,000 on common stock. At the beginning of 2011, 20,000 shares of common stock were outstanding. On July 1, 2011, the company issued 1,000 additional common shares. The preferred stock is not convertible.
Requireda. Compute the earnings per share.
b. How much of the earnings per share appears to be recurring?
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Which of the following are sources of cash?
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Storico Co. just paid a dividend of $1.60 per share. The company will increase its dividend by 20 percent next year and will then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent divid..
Percy Motors has a target capital structure of 35% debt and 65% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 8%, and its tax rate is 40%. Percy's CFO estimates that the company's WACC is 13.50%. ..
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