Respuesta :
342,000 shares were diluted using the treasury stock method and the if-converted method.
Market price is for a particular time, but normal price is for a period of time. Market price is the price prevailing on a particular day or a particular time. It is the result of market demand and supply. Normal price, on the other hand, is the result of long period demand and long period supply.
If options are exercised, proceed=No. of options x exercise price = $26,000 x $3.75 = $97,500of offers that can be bought with such proceeds=Proceeds/Normal market cost
=$97,500/$7.50
=13000 offers
No. of the new shares that will be issued as a result of the conversion of the convertible bond: $200,000 divided by $4, which equals 50,000 shares.
As a result, the number of diluted shares in circulation is.
= (No. of outstanding basic shares plus No. of fresh shares as a result of Options + No. of the convertible bond's new shares)-No. of the shares to be purchased is equal to (279,000 x 6000 x 5000) -13000. = 342,000 shares
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