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Apply the treasury method

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Reference no: EM132932123

EPS Calculation:

Problem 1: Freefall Co. has a basic EPS for the year ended 12/31/05 of $5 per share, based on a net income of $500,000 and 100,000 shares of common stock. The company has 20,000 options outstanding. Each option can be exercised to purchase one share of common stock. Assume that the options were issued prior to 1/1/05 and allow the holder to purchase stock at $20 per share. The average market price of the common stock during 2005 was $25 per share. Apply the treasury method.

Reference no: EM132932123

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