In: Accounting
1.
Ajax Enterprises had 220,000 shares of common stock issued and outstanding at December 31, 2025. Unexercised stock options to purchase 40,000 shares of common stock at $20 per share were outstanding at the beginning and end of 2026. The market price of Glendale's common stock was $25 per share during 2026. Net income for the year ended December 31, 2026, was $1,100,000. What should be Ajax's 2026 diluted earnings per common share, rounded to the nearest penny?
2.Ajax Corporation began 2024 with 100,000 common shares outstanding. On April 1, 2024 they issued 20,000 additional common shares. On August 1, 2024 they declared a 2 for 1 stock split. What is the weighted-average number of common shares for the year 2024?
1 | ||||
Calculate weighted average number of shares to calculated diluted earnings per share | ||||
Shares outstanding at beginning of period | 220,000 | |||
Shares under stock option | 8,000 | 40000 - (40000*20)/25 | ||
Weighted average no of shares | 228,000 | |||
Diluted earnings per share | Net income/Weighted average no of shares | |||
Diluted earnings per share | 1100000/228000 | |||
Diluted earnings per share | $4.82 | |||
Thus, diluted earnings per share is $4.82 | ||||
2 | ||||
Calculate weighted average number of shares outstanding | ||||
Common shares outstanding (100000*2) | 200,000 | |||
Additional shares issued (20000*2*9/12) | 30,000 | |||
Weighted average no of shares outstanding | 230,000 | |||
Thus, weighted average number of shares outstanding is $230,000 | ||||