(Solution) - Howat Corporation earned 360 000 during a period when it had -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Howat Corporation earned $360,000 during a period when it had an average of 100,000 shares of common stock outstanding. The common stock sold at an average market price of $15 per share during the period. Also outstanding were 15,000 warrants that could be exercised to purchase one share of common stock for $10 for each warrant exercised.

Instructions
(a) Are the warrants dilutive?
(b) Compute basic earnings per share.
(c) Compute diluted earnings per share.