Finning International Inc., headquartered in Vancouver, describes itself as the worlds largest Caterpillar equipment dealer, with operations

Finning International Inc., headquartered in Vancouver, describes itself as €œthe world€™s largest Caterpillar equipment dealer,€ with operations in Western Canada, South America, and the United Kingdom and Ireland. As at December 31, 2013, the company had a straightforward share capital structure described in Note 7 to the financial statements as: The Company is authorized to issue an unlimited number of preferred shares without par value, of which 4.4 million are designated as cumulative redeemable preferred shares. The Company had no preferred shares outstanding for the years ended December 31, 2013 and 2012.
The Company is authorized to issue an unlimited number of common shares. Exhibit 11-12 contains the 2013 consolidated statement of shareholders€™ equity. All amounts are in thousands.

Required:
a. Finning has an unlimited number of authorized shares on each class of shares. Why do many companies today prefer to have an unlimited authorized number of shares?
b. How many common shares were outstanding on December 31, 2013? What was the average issue value of those shares?
c. What was Finning€™s reported net income for 2013? How much did it pay out in dividends? What was its dividend payout ratio?
d. Using only the statement of shareholders€™ equity, calculate the return on equity for Finning for 2013 and 2012.

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EXHIBT 11-12 EXCERPT FROM FINNING INTERNATIONAL INC. 2013 ANNUAL REPORT Accumulated Other Share Capital Foreign Currency and Gain/ (Loss) on Gain Loss) on (Canadian S thousands, except share amounts) Balance, January 1, 2012 Net income (restated Note 1) Other comprehensive income Contributed Investment Cash Flow Retained ngs Shares Amount Surplus ges Hedges Eami Total 171,573,752 $566,452 $35,812 -$28,758 -$9,435 S780.883 $1,344,954 326,774 326,774 (loss) (restated Note 1 15.110) 2,829 3,248) -15 ,529) Total comprehensive income loss) (-15,110) 2,829 323,526 311,245 Issued on exercise of share 4,648 4.393) 4,627 336,006 Sharo option oxpense Dividonds on common sharos Balance, December 31, 2012 171,909,758 571,10036,04643,868) Net income 4,827 (94,527 1,566,554 335,255 94,527)94 6,606 1,009,882 335,255 income (loss) 71,971 7,894) 11,874) 52,403 Total comprehensive income loss) ,7 7,694) 323,381 387,658 Issued on exercise of share 104,472 2,065 2,002) 6,252 Share option expense Dividends on common shares Balanco. December 31. 2013 172.014.230 $573.15$40.296 -102,763) 102,763) $28.103 S14.300) $1.230,500 $1,857.764