Diluted earnings per share - diluted eps
This query is : Resolved
10 March 2012
Sir, i've quite confused about Diluted Earnings Per Share - Diluted EPS. Please can anybody explain me through an example?, it's urgent.
10 March 2012
Diluted earnings per share is earnings per share that fully reflects the impact the firm's dilutive securities (eg, convertible bonds) may have on earnings per share. Diluted earnings per share is distinguished from basic earnings per share, both of which are computed by dividing net income by the weighted average number of outstanding shares. But only diluted earnings per share assumes the exercise of stock options and warrants, and the conversion of convertible bonds and preferred shares, in computing outstanding shares. Because diluted earnings per share entails spreading net income over more outstanding shares, the additional equity dilutes (ie, reduces) earnings on a per-share basis. Diluted earnings per share is thus the more conservative measure of earnings per share.
Diluted earnings per share is earnings per share that fully reflects the impact the firm's dilutive securities (eg, convertible bonds) may have on earnings per share. Diluted earnings per share is distinguished from basic earnings per share, both of which are computed by dividing net income by the weighted average number of outstanding shares. But only diluted earnings per share assumes the exercise of stock options and warrants, and the conversion of convertible bonds and preferred shares, in computing outstanding shares. Because diluted earnings per share entails spreading net income over more outstanding shares, the additional equity dilutes (ie, reduces) earnings on a per-share basis. Diluted earnings per share is thus the more conservative measure of earnings per share.
12 March 2012
You are always welcome...
Keep sharing ur doubts...
Rgds
Keep sharing ur doubts...
Rgds
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