Determine the Basic and Diluted Earnings Per Share for Company X. All necessary Information is listed below. Show your calculations.
Company X information for Diluted Shares calculations for period 201X:
Earnings for Year 201X - $20 million
Average Basic shares outstanding for Company X in 201X - 10 million
Average Stock Price for year 201X - $6.00
Warrants to purchase common shares:
- Warrants A to purchase 2 million shares ex @ $2.00
- Warrants B to purchase 3 million shares ex @ $5.00.
Assume the A and B Warrants are the only additional securities outstanding (besides the basic shares) for Company X in 201X.