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Income Statement for CharmCorp: 2008 600 -532 2009 540 -488 52 68 -21 Total sales Cost of sales Gross Profit Selling, general and administrative expenses

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Income Statement for CharmCorp: 2008 600 -532 2009 540 -488 52 68 -21 Total sales Cost of sales Gross Profit Selling, general and administrative expenses Research and development Depreciation and amortization Operating Income Other income Earnings before interest and taxes (EBIT) Interest income (expense) -36 4 -5 23 1 -5 -5 21 5 24 -7 26 -7 . and administrative expenses -36 -21 Research and development -4 -5 Depreciation and amortization -5 -5 Operating Income 23 21 Other income 1 5 Earnings before interest and taxes (EBIT) 24 26 Interest income (expense) -7 -Z Pretax income 14 19 Taxes -4 -5 Net Income 10 14 Consider the above Income Statement for CharmCorp. All values are in millions of dollars. If CharmCorp has 6 million shares outstanding, and its managers and employees have stock options for 1 milion shares, what is its diluted EPS in 2008? A $0.71 B. $1.43 C. $1.71 OD. $1.14

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