Earnings Per Share Flashcards
1
Q
What type of capital structure does an entity have when it has only common stock outstanding?
A
Simple capital structure
2
Q
What is the formula for Basic EPS Formula?
A
Income available to common shareholders / Weighted-average number of common shares outstanding
3
Q
Calculation for Weighted-average number of common shares outstanding for the entire period.
A
Shares outstanding at the beginning of the period + Shares sold during the period - Shares reacquired during the period + Stock dividends and stock splits - Reverse stock splits
4
Q
Calculation for additional shares for options and similar instruments?
A
Number of shares - ((number of shares x exercise price)/average market price)
5
Q
What indicates if preferred stock is dilutive?
A
Diluted EPS < Basic EPS
