Myers Drugs Inc. has 1.20 million shares of stock outstanding. Earnings after taxes are $9 million. Myers
Question:
Myers Drugs Inc. has 1.20 million shares of stock outstanding. Earnings after taxes are $9 million. Myers also has warrants outstanding that allow the holder to buy 100,000 shares of stock at $15 per share. The stock is currently selling for $50 per share.
a. Compute basic earnings per share.
b. Compute diluted earnings per share considering the possible impact of the warrants. Use the followingformula:
Transcribed Image Text:
Earnings after taxes Shares outstanding +Assumed net increase in shares from the warrants
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Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
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