Fully vested incentive stock options exercisable at $30 per share to obtain 15,0
ID: 2454857 • Letter: F
Question
Fully vested incentive stock options exercisable at $30 per share to obtain 15,000 shares of common stock were outstanding during a period when the average market price of the common stock was $45 and the ending market price was $45.
By how many shares will the assumed exercise of these options increase the weighted-average number of shares outstanding when calculating diluted earnings per share
Number of shares _________?
By how many shares will the assumed exercise of these options increase the weighted-average number of shares outstanding when calculating diluted earnings per share
Number of shares _________?
Explanation / Answer
Answer:Formula: (Purchase of treasury stock*exercise price)/Average market price
=(15000 shares*$30)/$45
=10000 shares
No of shares is diluted=15000 shares-10000 shares
=5000 share
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