Earnings per Share
Response to the following problem:
The company had 300,000 shares of stock outstanding throughout the year. In addition, as of January 1 the company had issued stock options that allowed employees to receive 50,000 shares of stock for free at a time of their choosing in the future. As of the end of the year, none of the options had been exercised. Net income for the year was $510,000.
Compute
(1) basic earnings per share and
(2) diluted earnings per share.