Flashcards in Earnings per Share Deck (3)
What EPS figures are disclosed?
basic and diluted. Basic EPS is the EPS based only on actual transactions for the year. Diluted EPS is a "worst-case" figure reflecting the potential dilution of stock options and convertible securities.
What is basic EPS?
Includes only actual common shares outstanding.
BEPS = (net income) / (weighted average common shares outstanding)
BEPS = (net income - preferred stock dividend) / (weighted average common shares outstanding)