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Calculate the number of net increase in shares outstanding

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Reference no: EM132937443

Canary Wharf plc reported a net income of £2.4 million for the year ended 30 September 2018. The company had an average of 780,000 common shares outstanding. There were 36,000 options with an exercise price of £15 outstanding. There were no other potentially dilutive securities. Over the year, the company's market price averaged £25.

Problem i. Calculate the company's basic earnings per share.

Problem ii. Calculate the cash proceeds from exercising the stock options.

Problem iii. Calculate the number of shares that the proceeds calculated in (ii) above could purchase at the average market price?

Problem iv. Using the treasury stock method for stock options, calculate the number of net increase in shares outstanding following the exercise of the stock options.

Problem v. Calculate the diluted earnings per share.

Reference no: EM132937443

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