Find the company net income and earnings per share

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Sheridan Company has $1,200,000 in assets and $1,200,000 in stockholders' equity, with 42,200 shares outstanding the entire year. It has a return on assets of 15%. During 2021, it had net income of $180,000. On January 1, 2022, it issued $375,000 in debt at 4% and immediately repurchased 21,100 shares for $375,000. Management expected that, had it not issued the debt, it would have had net income of $180,000 in 2022. Assume the company pays dividends on common stock equal to its net income each year. Also, assume the accrued interest on the debt was paid at December 31, 2022 and the company has no other debt outstanding at year-end.

Problem 1: Determine the company's net income and earnings per share for 2021 and 2022. (Ignore taxes in your computations.) (Round earnings per share to 2 decimal places, e.g. $2.66.)

Reference no: EM132757100

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