Earnings per share (EPS) is a figure you will hear discussed a lot on CNBC.
What is the difference between basic and diluted EPS?
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Example 1:(Dont Copy paste the same)
Earning per share is the net income less preferred stock dividends divided by the weighted average common shares outstanding for the period (G-4). To investors, an EPS ratio can serve as an important indicator of a company’s operating value.
Basic EPS is calculated by:
Net income – dividends on preferred stock/weighted average of common shares outstanding during the year
Diluted EPS reflects the impact of additional shares that would be issued if all stock options and convertible securities are converted into common shares. Essentially, presuming the most-extreme case (8-24).
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