Exercise 16-26

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Wildhorse Company's net income for 2020 is $53,800. The only potentially dilutive securities outstanding were1,500options issued during 2019, each exercisable for one share at $6. None has been exercised, and10,300shares of common were outstanding during 2020. The average market price of Wildhorse's stock during 2020 was $25.

(a)Compute diluted earnings per share.(Round answer to 2 decimal places, e.g. $2.55.)

Diluted earnings per share$

(b)Assume the same facts as those assumed for part (a), except that the1,500options were issued on October 1, 2020 (rather than in 2019). The average market price during the last 3 months of 2020 was $25.(Round answer to 2 decimal places, e.g. $2.55.)

Diluted earnings per share