Diluted Earnings Per Share (Antidilution EPS For Stock Warrants & Options, How To Calculate)
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11 سال پیش
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Accounting and calculating anti-diluted earnings
Accounting and calculating anti-diluted earnings per share for stock warrants (stock options) using the treasury stock method to determine stock warants included in earnings per share, A company includes diluted earnings per share for stock options & warrants outstanding whether or not presently exercisable, unless they are antidilutive (not included), (A) Exercise Price less than Market Price (dilution increases C/S), Reduces EPS, include in diluted EPS reported on financial statement, (B) Exercise Price greater than Market Price (antidilution reduces C/S) Increases EPS, do not include in EPS reported in F/S, incremental shares based on treasury stock method: Number of shares = (market price - warrant price)/market price per share x number of warrant shares, diluted earnings per share = net income/average shares outstanding + potential incremental shares, Warrant may require other than cash exchanged for stock such as debt securities & becomes complex, Warrants inflate EPS, considered anti-dilutive & are excluded from the EPS computation, example based on cash purchase using stock warrant, Corp-A Earnings per Share based on: 1-Net Income for (20X1) is $500,000, 2-Stock Warrants outstanding 30,000 each exercisable for (1) share of Common Stock at $30 per share, 3-C/S outstanding during (20X1), 100,000 share,4-Average market price C/S during (20X1) was $25/share, detailed calculations by Allen Mursau
11 سال پیش
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