Question

Fully vested incentive stock options exercisable at $46 per share to obtain 20,000 shares of common stock were outstanding during a period when the average market price of the common stock was $50 and the ending market price was $50. What will be the net increase in the weighted-average number of shares outstanding due to the assumed exercise of these options when calculating diluted earnings per share?

Answer 1

1,600

Step-by-step explanation:

Cost of incentive stock options 20,000*46=$920,000

Shares at exercise price $920,000/50=18,400

Shares option difference 20,000-18,400=1,600