Saratoga Company had 650,000 shares of stock outstanding throughout the year. In addition, as of January 1

Question:

Saratoga Company had 650,000 shares of stock outstanding throughout the year. In addition, as of January 1 the company had issued stock options that allowed employees to receive 75,000 shares of stock for free at a time of their choosing in the future. As of the end of the year, none of the options had been exercised. Net income for the year was $1,360,000. Compute
(1) Basic earnings per share and
(2) Diluted earnings per share.