Werth AG earned €260,000 during a period when it had an average of 100,000 ordinary shares outstanding. The ordinary shares sold at an average market price of €15 per share during the period. Also outstanding were 30,000 warrants that could be exercised to purchase one ordinary share for €10 for each warrant exercised.
Instructions
a. Are the warrants dilutive?
b. Compute basic earnings per share.
c. Compute diluted earnings per share.