Diluted earnings per share
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B Company had 400,000 shares of common stock outstanding during the year 2008. In addition, at December 31, 2008, 90,000 shares were issuable upon exercise of executive stock options which require a $40 cash payment upon exercise (options granted in 2006). The average market price during 2008 was $50.
Can you please tell me the number of shares I would use to determine diluted earnings per share for 2008?
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The solution explains how to calculate the diluted earnings per share
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The diluted shares would be the additional shares that would be issued upon exercise of stock options. The additional shares are 90,000. ...
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