A corporation has 12,000 common shares and options to purchase 1,500 common shares at $10 per share outstanding the entire year. The average market price for the common stock during the year was $15 per share. In calculating the diluted earnings per share using the treasury stock method, the stock option would:
A. have an antidilutive impact on earnings per share because the assumed shares reacquired exceeds the assumed shares issued.
B. have an antidilutive impact on earnings per share because the assumed shares issued exceeds the assumed shares reacquired.
C. have a dilutive impact on earnings per share because the assumed shares issued exceeds the assumed shares reacquired.
D. have a dilutive impact on earnings per share because the assumed shares reacquired exceeds the assumed shares issued.
Answer:C
A corporation has 12,000 common shares and options to purchase 1,500 common shares at $10 per share outstanding the entire year. The average market price for the common stock during the year was $15 per share. In calculating the diluted earnings per share using the treasury stock method, the stock option would:
A. have an antidilutive impact on earnings per share because the assumed shares reacquired exceeds the assumed shares issued. B. have an antidilutive impact on earnings per share because the assumed shares issued exceeds the assumed shares reacquired. C. have a dilutive impact on earnings per share because the assumed shares issued exceeds the assumed shares reacquired. D. have a dilutive impact on earnings per share because the assumed shares reacquired exceeds the assumed shares issued.