Franklin Company had 100 shares of common stock issued and outstanding at December 31, 2010. On July 1, 2011, Ferris issued a 10 percent stock dividend. Unexercised stock options to purchase 20 shares of common stock (adjusted for the 2011 stock dividend) at $20 per share were outstanding at the beginning and end of 2011. The average market price of Franklin's common stock (which was not affected by the stock dividend) was $25 per share during 2011. The ending market price was $40. Net income for the year ended December 31, 2011, was $2,200. What was Franklin's 2011 diluted earnings per share, rounded to the nearest cent?
A) $19.30
B) $20.00
C) $20.20
D) $18.33

Question

Quizplus · Accepted Answer

The Answer of Franklin Company had 100 shares of common stock issued and outstanding at December 31, 2010. On July 1, 2011, Ferris issued a 10 percent stock dividend. Unexercised stock options to purchase 20 shares of common stock (adjusted for the 2011 stock dividend) at $20 per share were outstanding at the beginning and end of 2011. The average market price of Franklin's common stock (which was not affected by the stock dividend) was $25 per share during 2011. The ending market price was $40. Net income for the year ended December 31, 2011, was $2,200. What was Franklin's 2011 diluted earnings per share, rounded to the nearest cent?
A) $19.30
B) $20.00
C) $20.20
D) $18.33

Franklin Company Had 100 Shares of Common Stock Issued and Outstanding