EPS with Stock Options Keys Company had net income of $100,000 for the year ended December...

 

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EPS with Stock Options Keys Company had net income of $100,000 for the year ended December 31, 2005. The company had 10,000 shares of common stock outstanding at all times during the year. On January 1, 2005, the company issued 10,000 stock options. Each option can be used to pur- chase one share of common stock at $10 per share. The average market price of the com- mon stock during 2005 was $20 per share, and the closing price at December 31, 2005, was $25 per share. Required: 1. Calculate the required EPS figures for 2005. 2. Calculate the required EPS figures for 2005 assuming that the options were issued on April 1, 2005. (Assume that the average market price of the common stock was $20 and the closing price was $25.) 3. Calculate the required EPS figures for 2005, assuming that the average market price of the common stock was $8 per share and the closing price was $9. EPS with Stock Options Keys Company had net income of $100,000 for the year ended December 31, 2005. The company had 10,000 shares of common stock outstanding at all times during the year. On January 1, 2005, the company issued 10,000 stock options. Each option can be used to pur- chase one share of common stock at $10 per share. The average market price of the com- mon stock during 2005 was $20 per share, and the closing price at December 31, 2005, was $25 per share. Required: 1. Calculate the required EPS figures for 2005. 2. Calculate the required EPS figures for 2005 assuming that the options were issued on April 1, 2005. (Assume that the average market price of the common stock was $20 and the closing price was $25.) 3. Calculate the required EPS figures for 2005, assuming that the average market price of the common stock was $8 per share and the closing price was $9.

Answer rating: 100% (QA)

1 Basic EPS Profit attributable to equity shareholders Weighted avera... View the full answer