Qusetion: Myers Drugs, Inc., has 2 million shares of stock outstanding. Earnings after taxes are $6 million. Myers also has warrants outstanding that allow the holder to buy 100,000 shares of stock at $15 per share. The stock is currently selling for $50 per share.
a. Compute basic earnings per share.
b. Compute diluted earnings per share considering the possible impact of the warrants.