Kasravi Co. had net income for 2018 of $800,000. The average number of shares outstanding for the period was 300,000 shares. The

Question

2 years ago

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Kasravi Co. had net income for 2018 of $800,000. The average number of shares outstanding for the period was 300,000 shares. The

average number of shares under outstanding options, at an option price of $25 per share is 15,000 shares. The average market price of the common stock during the year was $30. What should Kasravi Co. report for diluted earnings per share for the year ended 2018

Business

1 answer:

navik [9.2K] · Answer 1 · 2022-05-07T08:53:52+03:00

Answer: $2.64

Explanation:

Based on the information given in the question, the outstanding diluted share will be calculated as:

= 300,000 + 15000(5/30)

= 300000 + 15000(0.16667)

= 300000 + 2500

= 302500

The amount that Kasravi Co. should report for diluted earnings per share for the year ended 2018 will be calculated as:

Diluted Earning per share = Net income /outstanding diluted share

= $800,000 / 302,500

= $2.64

ANSWER = (c) $2.64