The Following Information Applies to the Next Three Questions

question 39

Multiple Choice

The following information applies to the next three questions:
James Corporation currently has stock rights outstanding for 2,000 common shares. The exercise price of these shares is $20. The options were issued in January of 2009. The average market price of the related common stock during the year 2009 was $25. The average market price of the related common stock during 2010 was $21 and during 2011 was $19. The company's fiscal year ends on December 31 of each year.
How should these stock rights be treated in the earnings per share calculation for the year ending December 31, 2010?

• A) The stock options are antidilutive and should not be included either in basic or diluted earnings per share.
• B) The stock options are dilutive and should be included in diluted earnings per share in the amount of 95 shares.
• C) The stock options are dilutive and should be included in diluted earnings per share in the amount of 2,000 shares.
• D) The stock options are dilutive and should be included in diluted earnings per share in the amount of 400 shares.

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Definitions:

Verbs

Words that express actions, occurrences, or states of being.

Concrete Words

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Abstractions

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Grand Exaggerations

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