7 Millville Company had 100,000 shares of common stock outstanding throughout the year. In addition,...

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Accounting

7 Millville Company had 100,000 shares of common stock outstanding throughout the year. In addition, as of January 1, the company had issued stock options that allowed employees to purchase 40,000 shares of common stock. The option exercise price is $10 per share. The company has no other potentially dilutive securities. The employees did NOT exercise the options during the year. Net income for the year was $200,000.
Compute DILUTED earnings per share assuming that the average stock price for the year was $16.
$1.74
$1.21
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