Explore BrainMass

Explore BrainMass

    Diluted Earnings Per Shares Calculation

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Caruso Company had 500,000 shares of common stock issued and outstanding at December 31, 2007. On July 1, 2008 an additional 500,000 shares were issued for cash. Caruso also had stock options outstanding at the beginning and end of 2008 which allow the holders to purchase 150,000 shares of common stock at $20 per share. The average market price of Caruso's common stock was $25 during 2008. What is the number of shares that should be used in computing diluted earnings per share for the year ended December 31, 2008?

    1. 870,000

    2. 787,500

    3. 780,000

    4. 1,030,000

    © BrainMass Inc. brainmass.com June 3, 2020, 10:29 pm ad1c9bdddf
    https://brainmass.com/business/accounting/diluted-earnings-per-shares-calculation-233567

    Solution Summary

    This solution shows step-by-step calculations to determine the diluted earnings per shares calculation of the Caruso Company. All workings and formulas are shown for understanding.

    $2.19

    ADVERTISEMENT