Compute the basic and diluted earnings per share

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Problem - Major Corporation had 40,000 shares of common stock outstanding during 2019 with the following characteristics:

Par value per share $10

Average market value per share $50

Market value per share on 12/31/2016 $60

The company also has compensatory share options to purchase 5,000 shares of common stock at $40 a share during the year. The unrecognized compensation cost (net of tax) related to these share options is $5 per share. Net income for the year was $75,000.

Required - Compute the basic and diluted earnings per share for Major Corporation.

Reference no: EM132868333

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