Short Answer
The 2016 Form 10-K of NetFlix includes the following footnoted information. Use this information to answer the required.
The computation of net income per share is as follows:
Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive.
The following table summarizes the potential common shares excluded from the diluted calculation (in thousands):
Required:
a. What are the potential sources of dilution of NetFlix's earnings per share?
b. List two additional dilutive securities (other than those NetFlix includes).
c. NetFlix did not include all outstanding employee stock options in the calculation of diluted net income per share in 2016? Why not? How many options were excluded?
d. Calculate basic EPS for each of the three years.
e. Calculate diluted EPS for each of the three years.
Correct Answer:

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a. NetFlix has granted employee stock op...View Answer
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