Burnet Company Had 30,000 Shares of Common Stock Outstanding on January

Multiple Choice

Burnet Company had 30,000 shares of common stock outstanding on January 1, 2009. On April 1, 2009, the company issued 15,000 shares of common stock. The company had outstanding fully vested incentive stock options for 5,000 shares exercisable at $10 that had not been exercised by its executives. The end-of-year market price of common stock was $8 while the average for the year was $9. The company reported net income in the amount of $189,374 for 2009. What is the effect of the options?

A) The options are anti-dilutive.
B) The options will dilute EPS by $.09 per share.
C) The options will dilute EPS by $.33 per share.
D) The options will dilute EPS by $.17 per share.Market price is less than exercise price, so the options are ignored when computing EPS.