Question: On December 3 1 , Year 3 , Skye Inc. had 5 0 0 , 0 0 0 common shares outstanding and no preferred shares

On December 31, Year 3, Skye Inc. had 500,000 common shares outstanding and no preferred shares issued. On July 1, Year 4, an additional 50,000 common shares were issued. Skye Inc, also had unexercised call options to purchase 40,000 common shares at $15 per share outstanding throughout Year 4. The average market price of Skye Inc.'s common shares was $20 during Year 4. The number of shares that should be used in calculating diluted earnings per share for Year 4 is:
Select one:
O a 525,000.
Ob.535,000.
.560,000.
O d.565,000.

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