Calculate the diluted earnings per share

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Reference no: EM132028594

Little, Inc., reported earnings of $162,000 for 2013, and at the end of the year, had the following securities outstanding: 60,000 shares of common stock. (The year-end share price was $25 per share). Employee stock options for the purchase of 8,000 common shares at an exercise price of $22 per share. (The options are fully vested).

(a) Calculate the basic earnings per share for Little, Inc. for 2013. Round to two decimal places.

(b) Calculate the diluted earnings per share for Little, Inc. for 2013. Round to two decimal places.

Hint - Do not consider the effect of the treasury stock buyback as this technical issue is not covered in the chapter.

Reference no: EM132028594

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