SHOW WORK

The following information relates to Victor Inc.s earnings per share computations for 2016:

Net income $ 1,350,000

Preferred dividends declared on nonconvertible preferred stock 202,500

Weighted average of common shares outstanding 900,000

Additional information for 2016:

At December 31, 2016, the company had the following stock options outstanding from 2015 and 2016:

Year Grant date Number of options Exercise price Exercisable beginning on

2015 1/1/15 100,000 $51 1/1/17

2016 1/1/16 200,000 $45.50 1/1/18

During 2016, the average market price per share of Victors common stock was $50, while the closing market price on December 31 was $52. For the year ended December 31, 2016, what is Victors diluted earnings per share on net income and is it reported on the face of Victors income statement?

Reported on the face

Diluted EPS of the income statement

A. $1.26 No

B. $1.24 Yes

C. $1.25 Yes

D. $1.25 No