(CMA adapted, Dec 89 #8) On January 1, Year 1, Toga Corporation granted stock options to top management. The options were exercisable within 4 years from the date of grant only if the employee was still in Toga's employ. When computing year-end earnings per share at December 31, Year 1, Toga should
a. exclude the options until the year they are exercisable.
b. include the options in diluted earnings per share if they are dilutive.
c. include the options in diluted earnings per share if they are antidilutive.
d. ignore the options because they are not considered common stock equivalents.
e. recognize the value of the options each year in the income statement until they are exercised.
B
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