Zambrano plc net income for 2019 is £40,000. The only potentially dilutive securities outstanding were 1,000 options issued during 2018, each exercisable for one share at £8. None has been exercised, and 10,000 ordinary shares were outstanding during 2019. The average market price of Zambrano's shares during 2019 was £20.
Instructions
a. Compute diluted earnings per share. (Round to two decimal places.)
b. Assume the same facts as those assumed for part E16.27a., except that the 1,000 options were issued on October 1, 2019 (rather than in 2018). The average market price during the last 3 months of 2019 was £20.