Question

Niles Company granted 111 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares have a market price of $22 per share on January 1, 2020, the grant date of the restricted stock award. When calculating diluted EPS at December 31, 2021, what will be the net increase in the weighted-average number of shares outstanding if the market price of the common shares averaged $22 per share during 2021?

Answer 1

Answer:

Net increase in the denominator will be equal to the new shares which Niles will issued to their executives.

Thus, increase in the denominator = 111 million