Interpreting changes in earnings per share Company A and Company B both start 2008 with $1 million
a. Compute earnings per share for Company A and for Company B for 2008 and for 2009.
b. Compute the rate of growth in earnings per share for Company A and Company B. comparing earnings per share in 2009 with earnings per share in 2008.
c. Using the rate of growth in earnings per share as the criterion, which company’s management appears to be doing a better job for its shareholders? Comment on this result.
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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