SWitter House is a calendar-year firm with 460 million common shares outstanding throughout 2024 and 2025. As part of its executivecompensation plan, at January 1, 2023, the company had issued 40 million executive stock options permitting executives to buy 40million shares of stock for $10 within the next eight years, but not prior to January 1, 2026.• The fair value of the options was estimated on the grant date to be $3 per option.In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensationplans and granted 25 million restricted common shares to senior executives at January 1, 2024.⚫ The shares vest three years later.• The fair value of the stock was $16 per share on the grant date.⚫ The average price of the common shares was $16 and $25 during 2024 and 2025, respectively..The stock options qualify as an incentive plan.. The restricted stock does not.The company's net income was $310 million and $320 million in 2024 and 2025, respectively.Required:1. Compute basic and diluted earnings per share for Witter House in 2024.2. Compute basic and diluted earnings per share for Witter House in 2025.Note: Do not round intermediate calculations. Except for per share amounts, enter your answers in millions (i.e., 10,000,000should be entered as 10). Round "Earnings per share" answer to 2 decimal places. Round "Denominator" answers to 2decimal places.NumeratorDenominator=Earnings per shareBasic$310460 =$0.671.Diluted$310460.68$0.68Basic$320460=$0.702.Diluted$320=$0.71

It represents the portion of a company's profit allocated to each outstanding share of common stock.…

Answered: Witter House is a calendar-year firm…

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