Crane Corporation reported net income of $234,910 in 2020 and had 152,000 common shares outstanding throughout...

Crane Corporation reported net income of $234,910 in 2020 and had 152,000 common shares outstanding throughout the year. Also outstanding all year were 51,000 (written) options to purchase common shares at $10 per share. The average market price for the common shares during the year was $15 per share.

QUESTION:

Calculate the diluted earnings per share. (Round answer to 2 decimal places, e.g. 15.25.)

Diluted earnings per share

$______

Expert Solution

Value of options in shares = [options issued*exercise price per share ]/current share price

= [51000 * 10 ] /15

= 510000/15

= 34000 shares

Diluted shares= options issued-Value of options in shares

=51000 -34000

= 17000 shares

Diluted earning per share = Net income /[current shares outstanding +diluted shares]

= 234910 / [152000+17000]

= 234910 /169000

= $ 1.39 per share

ekkarill92 answered 2 years ago

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Crane Corporation reported net income of $234,910 in 2020 and had 152,000 common shares outstanding throughout...

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