The Following Information Applies to the Next Three Questions

question 68

Multiple Choice

The following information applies to the next three questions:
Tangier Corporation currently has stock rights outstanding for 2,000 common shares.The exercise price of these shares is $25.The options were issued in January of 2012.The average market price of the related common stock during the year 2012 was $30.The average market price of the related common stock during 2013 was $26 and during 2014 was $21.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 31,2014?

• A) The stock options are antidilutive and should not be included 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 381 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 333 shares.

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Definitions:

Total Revenues

The total amount of income generated by the sale of goods or services related to the company's primary operations.

Least Elastic Supply

A situation in the market where the supply of a product or service is least responsive to changes in price.

Midpoint Method

A technique used in economics to calculate the elasticity of demand or supply by averaging the start and end points of a range.

Drug Interdiction

The policy or practice of preventing the importation, trafficking, and use of illegal drugs by enforcement or military means.