Diluted Earnings Per Share

question 37

Essay

Diluted earnings per share
During 2020, Basenji Corp. had 300,000 common shares outstanding. In addition, at December 31, 2020, 50,000 shares were issuable upon exercise of executive stock options, which require a $ 40 cash payment upon exercise (options were granted in 2018). The average market price of the common shares during 2020 was $ 50.
Instructions
Calculate the number of shares to be used in determining diluted earnings per share for 2020.

---

Definitions:

Financial

Pertaining to monetary dealings or the management of funds in a business or personal context.

Industrial Products Salesperson

A professional who specializes in selling goods and materials used in production and manufacturing processes to businesses.

Computer Chip Manufacturers

Computer chip manufacturers are companies engaged in the design, development, and fabrication of microchips or integrated circuits used in various electronic devices.