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I need help rush I don't understand this homework at all Witter House is a calendar-year firm with 340 million common shares outstanding throughout 2021
I need help rush I don't understand this homework at all
Witter House is a calendar-year firm with 340 million common shares outstanding throughout 2021 and 2022 As part of its executive compensation plan, at January 1, 2020, the company had issued 50 million executive stock options permitting executives to buy 50 million shares of stock for $10 within the next eight years, but not prior to January 1, 2023. The fair value of the options was estimated on the grant date to be $3 per option. In 2021, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 25 million restricted common shares to senior executives at January 1, 2021. The shares vest four years later. The fair value of the stock was $20 per share on the gran date. The average price of the common shares was $20 and $25 during 2021 and 2022, respectively The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $190 million and $200 million in 2021 and 2022, respectively. Required: 1. Compute basic and diluted earnings per share for Witter House in 2021. 2. Compute basic and diluted earnings per share for Witter House in 2022 (For all requirements, do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 10,000,000 should be entered as 10). Round "Earnings per share" answers to 2 decimal places.) Numerator Denominator Earnings per share 1. Basic Diluted 190 / 1901 / $ 340 390.00 2. Basic Diluted $ 2000 / 200 On February 28, 2021. Dow sold 56,000 common shares. In keeping with its long-term share repurchase plan. 5,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2021, was $2,550,000. The income tax rate is 25% Also, as a part of a 2020 agreement for the acquisition of Merrill Cable Company, another 27,000 shares (already adjusted for the stock dividend) are to be issued to former Merrill shareholders on December 31, 2022, if Merrill's 2022 net income is at least $590,000. In 2021, Merrill's net income was $720,000 As part of an incentive compensation 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 December 31, 2019 December 31, 2020 December 31, 2021 Options Granted (adjusted for the stock dividend) 16,000 11,000 14,500 Share Price $ 24 $ 33 $ 32 The market price of the common stock averaged $32 per share during 2021 On July 12, 2019. Dow issued $700,000 of convertible 8% bonds at face value. Each $1,000 bond is convertible into 40 common shares (adjusted for the stock dividend). Required: Compute Dow's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands Round "Earnings per share" answers to 2 decimal places. Do not round intermediate calculations) Dow's basic Dow's diluted Numerator / Denominator $ 2.4721 / 771 $ 2.4727 Earnings per share 3.21Step by Step Solution
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