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XYZ Corporation earned $2,650,000 during 2014. The company had an average of 520,000 shares of common stock outstanding. The average market price of common stock
XYZ Corporation earned $2,650,000 during 2014. The company had an average of 520,000 shares of common stock outstanding. The average market price of common stock was $32 per share during the year. The company also had 50,000 warrants outstanding, of which two warrants could be exercised to purchase one share of common stock for $30 in total. (a) Are the warrants dilutive? (b) Compute basic earnings per share. (c) Compute diluted earnings per share.
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