Question
Stellar Companys net income for 2017 is $45,200. The only potentially dilutive securities outstanding were 800 options issued during 2016, each exercisable for one share
Stellar Companys net income for 2017 is $45,200. The only potentially dilutive securities outstanding were 800 options issued during 2016, each exercisable for one share at $6. None has been exercised, and 10,100 shares of common were outstanding during 2017. The average market price of Stellars stock during 2017 was $25.
(a) Compute diluted earnings per share.
(b) Assume the same facts as those assumed for part (a), except that the 800 options were issued on October 1, 2017 (rather than in 2016). The average market price during the last 3 months of 2017 was $25.
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