Venezuela Company’s net income for 2020 is $50,000. The only potentially dilutive securities outstanding were 1,000 options issued during 2019, each exercisable for one share at $6. None has been exercised, and 10,000 shares of common were outstanding during 2020. The average market price of Venezuela’s stock during 2020 was $20.

Compute diluted earnings per share.

$4.67 per share

Explanation:

The computation of the diluted earning per share is shown below:

= (Total income - preference dividends) ÷ ( outstanding shares + diluted shares)

where,

Total income is $50,000

Outstanding shares is 10,000

And, the diluted shares is

Amount paid towards shares = Options issued × Exercise price per share

= 1,000 × 6

= $6,000

And,

Value of options = Amount paid towards shares ÷ Current market price

= $6,000 ÷ $20

= 300

So,

Diluted shares is

= Options issued - value of options

= 1,000 - 300

= 700

So Diluted Earnings per share is

= ($50,000) ÷ (10,000 + 700)

= $4.67 per share

We simply applied the above formula

lives by a moral and ethical code

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.