Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Options that are out of the money (meaning the exercise price is higher than the current market price of the underlying stock) are ignored in earnings per share calculations. Options that are in the money (exercise price lower than current market price) are included in diluted earnings per share calculations using the treasury stock method. Contingently issuable shares may be included in diluted EPS calculations depending on their likelihood of issuance. The treasury stock method is used for both written call and put options.

Which of the Following Statements Is Correct