Question 1:

• During the year P had 14195 shares of common stock outstanding.
• P had fully vested incentive stock options exercisable at $4 per share to obtain 1203 shares of common stock when the average market price and ending market price of the stock of common stock was $50.
• The net income for the year was $126693.
• The income tax rate was 37%.

For the year diluted EPS was:

Question 2:

At December 31, 2016 and 2015, P Corp. had

• 16678 shares of common stock
• 1533 shares of 12%, $90 par value convertible preferred stock convertible share for share into common stock
• Net income for 2016 was $120132
• The income tax rate was 36%

For 2016, diluted EPS was: