Incentive stock options to purchase 40 million shares of common stock after July
ID: 2483832 • Letter: I
Question
Incentive stock options to purchase 40 million shares of common stock after July 1, 2015, at $14 per share were outstanding at the beginning and end of 2016. The average market price of Canaday’s common stock was $20 per share during 2016.
Canaday's net income for the year ended December 31, 2016, was $1,512 million. The effective income tax rate was 40%.
Calculate basic earnings per common share for the year ended December 31, 2016. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
At January 1, 2016, Canaday Corporation had outstanding the following securities:Explanation / Answer
in Million 01-Jan-16 No. of Coomon Shares 690 01-Sep-16 Additional Shares Sold 72 Total no. of Shares 762 Net Income 1512 Tax @ 40% 604.8 Income After tax 907.2 Earning Per Common Shares (in Mill) 1.19 (907.2/762)