E16-26B (L05) (EPS with Options, Various Situations) Backhome Companys net income for 2017 is $650,000, and 86,000 shares of common were issued and outstanding during 2017. The only potentially dilutive securities outstanding were 25,000 executive stock options issued during 2016, each exercisable for one share at $20.50; none of these have been exercised. The average market price of Backhomes stock during 2017 was $26.

Instructions

(a) Compute diluted earnings per share. (Round to nearest cent.)