FED Had 100 Common Shares Issued and Outstanding at December

question 94

Multiple Choice

FED had 100 common shares issued and outstanding at December 31,2013.On July 1,2014,FED issued a 10 percent stock dividend.Unexercised stock options to purchase 20 common shares (adjusted for 2014 stock dividend) at $20 per share were outstanding at the beginning and end of 2014.The average market price of FED'S common shares (which was not affected by the stock dividend) was $25 per share during 2014.The ending market price was $40.FED earned interest at 8% and had a 50% tax rate.Net income for the year ended December 31,2014,was $2,200.What was FED'S 2014 diluted earnings per share,rounded to the nearest cent?

• A) $17.05
• B) $17.17
• C) $18.47
• D) $18.60

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Definitions:

Bureaucracy

An organizational structure within a government or private organization consisting of multiple levels and roles, responsible for the administration and execution of policies.

Congress

The national legislative body of the United States, consisting of two houses: the Senate and the House of Representatives.

Executive

A branch of government responsible for implementing and enforcing laws, typically headed by a president or prime minister.

Individualistic Behavior

Actions or attitudes that prioritize personal goals and self-expression over collective goals or communal responsibilities.