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(a)
Earnings per share:
Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders’.
The following formula can be used to calculate earnings per share:
To determine: The earnings per share of Company P for Year 3, Year 2, and Year 1.
(b)
To evaluate: The growth in earnings per share for 3 years in comparison to the growth in net income for the 3 years.
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Chapter 11 Solutions
Bundle: Financial & Managerial Accounting, Loose-leaf Version, 13th + CengageNOWv2, 1 term (6 months) Printed Access Card Corporate Financial ... Access Card for Managerial Accounting, 13th
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