Question
Jack-N-Jill had granted 70,000 stock options (put options) to some of its executives, and each option gave the holder the right to sell to Jack-N-Jill,
Jack-N-Jill had granted 70,000 stock options (put options) to some of its executives, and each option gave the holder the right to sell to Jack-N-Jill, one share at the option price of $19 per share. None of these options have yet been exercised throughout 2019. The average market price of Jack-N-Jill's common shares during 2019 was $14. Using the reverse treasury stock method, what is the income and the number of shares that should be used in calculating diluted earnings per share for 2019?
Select one:
a.
$0 and 25,000 shares.
b.
$0 and 95,000 shares.
c.
$1,330,000 loss and 70,000 shares.
d.
$1,330,000 loss and 95,000 shares.
e.
$3,330,000 and 90,000 shares.
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