Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January

image text in transcribed
image text in transcribed
Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1,2023 , the company had issued 30 million executive stock options permitting executives to buy 30 miltion shares of stock for $10 within the next eight years, but not prior to January 1, 2026. - The fair value of the options was estimated on the grant date to be $3 per option. - In 2024. Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 15 million restricted common shares to senior executives at January 1.2024. - The shares vest three years later. - The fair value of the stock was $12 per share on the grant date. - The average price of the common shares was $12 and $15 during 2024 and 2025 , respectively. - The stock options qualify as an incentive plan. - The restricted stock does not. - The company's net income was $150 million and $160 million in 2024 and 2025 , respectively. Required: 1. Compute basic and diluted earnings per share for Witter House in 2024 2. Compute basic and diluted earnings per share for Witter House in 2025. Note: Do not round intermediate calculations. Except for per share amounts, enter your answers in millions (i.e., 10,000,000 should be entered as 10). Round "Eornings per share" answer to 2 decimal places. Round "Denominator" answers to 2 decimal ploces. 1. Compute basic and diluted earnings per share for Witter House in 2024. 2. Compute basic and diluted earnings per share for Witter House in 2025. Note: Do not round intermediate calculations. Except for per share amounts, enter your answers in millions (i.e., 10,000,000 should be entered as 10). Round "Earnings per share" answer to 2 decimal places. Round "Denominator" answers to 2 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Project Management Accounting Budgeting Tracking And Reporting Costs And Profitability

Authors: Kevin R. Callahan, Gary S. Stetz, Lynn M. Brooks

1st Edition

0470044691, 978-0470044698

More Books

Students also viewed these Accounting questions

Question

WRONG ANSWER OR CHAT GPT ANSWER 5 0 DISLIKES GET READY ( smk 9 )

Answered: 1 week ago

Question

List the different categories of international employees. page 689

Answered: 1 week ago