During 2024, Farewell Incorporated had 511,000 shares of common stock and 55,500 shares of 4% cumulative preferred stock outstanding. The preferred stock has a par value of $100 per share. Farewell did not declare or pay any dividends during 2024 Farewell's net income for the year ended December 31, 2024, was $3.6 million. The income tax rate is 15%. Farewell granted 21,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common stock at an exercise price of $40 per share. The options vest after one year. The market price of the common stock averaged $41 per share during 2024. What is Farewell's-diluted earnings per share for 2024, rounded to the nearest cent? Multiple Choice $6.48 Cannot determine from the given information $6.91 56.61
During 2024, Farewell Incorporated had 511,000 shares of common stock and 55,500 shares of 4% cumulative preferred stock outstanding. The preferred stock has a par value of $100 per share. Farewell did not declare or pay any dividends during 2024 Farewell's net income for the year ended December 31, 2024, was $3.6 million. The income tax rate is 15%. Farewell granted 21,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common stock at an exercise price of $40 per share. The options vest after one year. The market price of the common stock averaged $41 per share during 2024. What is Farewell's-diluted earnings per share for 2024, rounded to the nearest cent? Multiple Choice $6.48 Cannot determine from the given information $6.91 56.61
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:During 2024, Farewell Incorporated had 511,000 shares of common stock and 55,500 shares of 4% cumulative preferred stock
outstanding. The preferred stock has a par value of $100 per share. Farewell did not declare or pay any dividends during 2024
Farewell's net income for the year ended December 31, 2024, was $3.6 million. The income tax rate is 15%. Farewell granted
21,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common
stock at an exercise price of $40 per share. The options vest after one year. The market price of the common stock averaged $41
per share during 2024.
What is Farewell's-diluted earnings per share for 2024, rounded to the nearest cent?
Multiple Choice
$6.48
Cannot determine from the given information
$6.91
$6.61
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