Myers Drugs Inc. has 2.5 million shares of stock outstanding. Earnings after taxes are $6 million. Myers also has warrants outstandingthat allow the holder to buy 100,000 shares of stock at $10 per share. The stock is currently selling for $50 per share.a. Compute basic earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.)Basic earnings per shareb. Compute diluted earnings per share considering the possible impact of the warrants. Assume the cash proceeds are used torepuchase shares. (Do not round intermediate calculations and round your answer to 2 decimal places.)Use the following formula:Earnings after taxesShares outstanding + Assumed net increase in shares from the warrantsDiluted earnings per share

Formula to calculate the basic EPS is: Basic EPS = Earnings after tax/No of outstanding shares…

Answered: ermediate calcul-

Business

Finance

ermediate calcul-

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 55E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...

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