单选题 An analyst gathered the following data about a company: The company had 500000 shares of common stock outstanding for the entire year. The company' s beginning stock price was $40, its ending price was $ 60, and its average price is $ 50. The company has 120000 warrants outstanding for the entire year. Each warrant allowed the holder to buy one share of common stock at $ 45 per share. How many shares of common stock should the company use in computing its diluted earnings per share ?

A、

A. 488000.
B、

B. 500000.
C、

C. 512000.

【正确答案】 C

【答案解析】Dilution occurs since the exercise price for the warrants ($ 45) is less than the average market price for the shares($ 50). The incremental number of shares outstanding is found from : Number of shares to use in diluted EPS calculation = 500000 + 12000 = 512000.