Answer:
c. 342,000
Explanation:
Missing question and Multiple Option <em>" & if-converted methods? 305,000, 292,000, 342,000, 345,333"</em>
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Proceeds expected if option are exercised = No of outstanding options and warrants * Per share exercise price
Proceeds expected if option are exercised = 26,000 * $3.75
Proceeds expected if option are exercised = $97,500
Number of treasury shares expected to be purchased = Proceeds expected if option are exercised / Average market price per share
Number of treasury shares expected to be purchased = $97,500 / $7.50
Number of treasury shares expected to be purchased = $13,000
Number of new shares issued if conversion is effected = Amount of convertible bonds reported / Effective conversion price per share
Number of new shares issued if conversion is effected = $200,000 / $4
Number of new shares issued if conversion is effected = 50,000
Calculation of the Diluted Share Outstanding
Number of basic shares outstanding 279,000
Add: Number of new shares through options 26,000
Add: Number of new shares through conversion issued 50,000
Less: Number of treasury shares to be purchased <u>(13,000) </u>
Diluted Share Outstanding <u>342,000</u>