Bonita Company’s net income for 2017 is $51,000. The only potentially dilutive s
ID: 2331759 • Letter: B
Question
Bonita Company’s net income for 2017 is $51,000. The only potentially dilutive securities outstanding were 1,000 options issued during 2016, each exercisable for one share at $6. None has been exercised, and 9,000 shares of common were outstanding during 2017. The average market price of Bonita’s stock during 2017 was $25. (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, 2017 (rather than in 2016). The average market price during the last 3 months of 2017 was $25. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $
Explanation / Answer
A) COMPUTATION OF DILUTED EPS VALUE OF CURRENT SHARE OF OPTION 1000*6/25 240 DDILUTED SHARE 1000-240 760 DILUTED EPS 51000/9000+760 51000/9000+760 5.22 B) diluted EPS 51000/9000 5.67