Question
The company had 100,000 shares of common stock outstanding on January 1. In addition, as of January 1, the company had issued stock options that
The company had 100,000 shares of common stock outstanding on January 1. In addition, as of January 1, the company had issued stock options that allowed employees to purchase 40,000 shares of common stock. The option exercise price is $10 per share. The options were exercised on April 1. The average stock price for the year was $16; the stock price on the option exercise date (April 1) was $15. The company has no other potentially dilutive securities. Net income for the year was $200,000. In your computations, round all weighted-average number of shares to the nearest whole number. Round the earnings per share to the nearest cent.
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