Question
Assume the same information as above:and as part of an incentive compensations plan, Dow granted incentive stock options to division managers at December 31 of
Assume the same information as above:and as part of an incentive compensations plan, Dow granted incentive stock options to division managers at December 31 of the current and each of the previous two years. Each option permits its holder to buy one share of common stock at an exercise price equal to market value at the date of grant and can be exercised one year from that date. Information concerning the number of options granted and common share prices follows:
Date Granted
Options Granted
Share Price
(Adjusted for the stock dividend)
December 31, 2014
8,000
$24
December 31, 2015
3,000
$33
December 31, 2016
6,500
$32
The market price of the common stock averaged $32 per share during 2016.
Required: Compute Dows basic and diluted earnings per share for the year ended December 31, 2016.
(note:Consider the dates)
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