Sagar Witter House is a calendar-year firm with 440 million common shares outstanding throughout 2024 and 2025. As part of its executivecompensation plan, at January 1, 2023, the company had issued 30 million executive stock options permitting executives to buy 30million shares of stock for $14 within the next eight years, but not prior to January 1, 2026.• The fair value of the options was estimated on the grant date to be $3 per option.•In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensationplans and granted 25 million restricted common shares to senior executives at January 1, 2024.⚫ The shares vest three years later.• The fair value of the stock was $20 per share on the grant date.• The average price of the common shares was $20 and $30 during 2024 and 2025, respectively.• The stock options qualify as an incentive plan.• The restricted stock does not.• The company's net income was $290 million and $300 million in 2024 and 2025, respectively.Required:1. Compute basic and diluted earnings per share for Witter House in 2024.2. Compute basic and diluted earnings per share for Witter House in 2025.Note: Do not round intermediate calculations. Except for per share amounts, enter your answers in millions (i.e., 10,000,000should be entered as 10). Round "Earnings per share" answer to 2 decimal places. Round "Denominator" answers to 2decimal places.> Answer is complete but not entirely correct.NumeratorBasic$290÷1.Diluted$290Basic$3002.Diluted$300+DenominatorEarnings pershare440$0.66454.00|=$0.64440= $0.68478.70 x =69$0.67

Earning per share:The earning per share is popularly known in short as the EPS which means the…

Required: 1. Compute basic and diluted earnings per share for Witter House in 2024. 2. Compute basic and diluted earnings per share for Witter House in 2025. Note: Do not round intermediate calculations. Except for per share amounts, enter your answers in millions (i.e., 10,000,000 should be entered as 10). Round "Earnings per share" answer to 2 decimal places. Round "Denominator" answers to 2 decimal places. > Answer is complete but not entirely correct. Numerator Denominator Earnings per share

Required: 1. Compute basic and diluted earnings per share for Witter House in 2024. 2. Compute basic and diluted earnings per share for Witter House in 2025. Note: Do not round intermediate calculations. Except for per share amounts, enter your answers in millions (i.e., 10,000,000 should be entered as 10). Round "Earnings per share" answer to 2 decimal places. Round "Denominator" answers to 2 decimal places. > Answer is complete but not entirely correct. Numerator Denominator Earnings per share

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 14P

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