Share Options, EPS
Response to the following problem:
Butler Company has 30,000 shares of common stock outstanding during all of 2010. This common stock has been selling at an average market price of $45 per share. The company also has outstanding for the entire year compensatory share options to purchase 4,000 shares of common stock at $32 per share. The unrecognized compensation cost (net of tax) relating to these share options is $3 per share. During 2010 Butler Company earned income of $36,000 after income taxes of 30%.
Required
1. Compute the 2010 diluted earnings per share for Butler Company.
2. Assume Butler Company uses IFRS. Discuss what Butler Company would do differently for computing earnings per share, and then compute its earnings per share.