Landrover, Inc. had 150,000 shares of common stock issued and outstanding at December 31, 2010. On July

Question:

Landrover, Inc. had 150,000 shares of common stock issued and outstanding at December 31, 2010. On July 1, 2011, an additional 25,000 shares of common stock were issued for cash. Landrover also had unexercised stock options to purchase 20,000 shares of common stock at $15 per share outstanding at the beginning and end of 2011. The market price of Landrover's common stock was $20 throughout 2011. What number of shares should be used in computing diluted earnings per share for the year ended December 31, 2011?

a. 182,500

b. 180,000

c. 177,500

d. 167,500

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...