Question $7$

Grouper Company's net income for $2025$ is $$619,000,$ and $82,000$ shares of common stock

were issued and outstanding during $2025.$ The only potentially dilutive securities

outstanding were $23,000$ executive stock options issued during $2024,$ each exercisable for

one share at $$20\mathrm{.}50$; none of these have been exercised. The average market price of

Grouper's stock during $2025$ was $$26.$

$($a$)$ Compute diluted earnings per share. $($Round answer to $2$ decimal places, e$.$g$.2\mathrm{.}55.)$

Diluted earnings per share

$($b$)$ Assume the same facts as those assumed for part $($a$),$ except that $10,000$ additional

options were issued on October $1,2025,$ with an exercise price of $$27($the market price of

the common stock on that date$).$ The average market price during the last $3$ months of $2025$

was $$29\mathrm{.}50.($Round answer to $2$ decimal places, e$.$g$.2\mathrm{.}55.)$

Diluted earnings per share