Question: Assume the same information as in BE17-20 except that the put options allow the holder to sell Redpath's shares to Redpath at $6 each. How

Assume the same information as in BE17-20 except that the put options allow the holder to sell Redpath's shares to Redpath at $6 each. How should these options be treated when calculating the diluted EPS?

Data From BE17-20:

Use the same information as in BE17-19 and assume that Redpath also wrote put options that allow the holder to sell 25,000 of Redpath's shares to Redpath at $8 per share. Calculate the incremental shares outstanding for Redpath Limited.

Data From BE17-19:

Redpath Limited purchased 25,000 call options during the year. The options give the company the right to buy its own common shares for $4 each. The average market price during the year was $7 per share. Calculate the incremental shares outstanding for Redpath Limited.

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