QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS

46. Catallaxy Education Limited (CEL) had 500,000 average shares outstanding during all of 2011. During 2011, CEL also had 5,000 options outstanding with exercise prices of $10 each. The average stock price of CEL during 2011 was $20. For purposes of computing diluted earnings per share, how many shares would be used in the denominator? A. 500,000 B. 502,500 C. 505,000

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