Dulce Corporation had 200,000 shares of common stock outstanding during the current year. There were also fully vested options for 10,000 shares of common stock were granted with an exercise price of $20. The market price of the common stock averaged $25 for the year. Net income was $4 million. What is diluted EPS (rounded)?
A) $20.00.
B) $19.80.
C) $19.23.
D) $18.18.

Question

Quizplus · Accepted Answer

$\frac{\$ 4,000,000}{200,000+\left(10,000-8,000^{*}\right)}=\frac{\$ 4,000,000}{202,000}=\$ 19.80$ *(10,000 × $20) ÷ $25 = 8,000

Dulce Corporation Had 200,000 Shares of Common Stock Outstanding During