XYZ company earns a net profit of $250,000, and has $3,000,000 common shares outstanding that sell on the open market for an average of $12 per share. In addition, there are 230,000 options outstanding that can be converted to XYZ company’s common stock at $10 each.
Please provide the clear calculation on each question and brief explanation with your analysis. .
1. Calculate XYZ company Earning per share (EPS)
2. Calculate the number of shares that would have been issued at the market price.
3. Calculate the shares have been purchased with the proceeds from the options
4. Calculate the number of shares that could have been purchased from the number of options exercised.
5. Calculate the incremental number of share to the shares already outstanding.
6. Calculate the Diluted Earnings per share.