Detailed Answer
Answer (A) is correct. BEPS is net income available to common shareholders divided by the weighted average number of common shares outstanding during the year. The denominator will include the 40,000 shares already outstanding plus the 4,000-share stock dividend (stock dividends and stock splits are deemed to have occurred at the beginning of the earliest period presented). Thus, 44,000 shares are considered to have been outstanding throughout the year. The stock options have no effect on the weighted-average shares outstanding because they were not exercised in the current period. BEPS is $5.22 ($229,680 ÷ 44,000).