Exercise 16-26
Venzuela Company’s net income for
2014 is $46,800. The only potentially dilutive securities
outstanding were 1,000 options issued during 2013, each exercisable
for one share at $8. None has been exercised, and 10,900 shares of
common were outstanding during 2014. The average market price of
Venzuela’s stock during 2014 was $20.
2014 is $46,800. The only potentially dilutive securities
outstanding were 1,000 options issued during 2013, each exercisable
for one share at $8. None has been exercised, and 10,900 shares of
common were outstanding during 2014. The average market price of
Venzuela’s stock during 2014 was $20.
(a) Compute diluted earnings per share.
(Round answer to 2 decimal places, e.g.
$2.55.)
| Diluted earnings per share |
$
 |
(b) Assume the same facts as those assumed for
part (a), except that the 1,000 options were issued on October 1,
2014 (rather than in 2013). The average market price during the
last 3 months of 2014 was $20. (Round answer to 2
decimal places, e.g. $2.55.)
| Diluted earnings per share |
$
|
