Class17 - Dilutive2

Class17 - Dilutive2 - M351 Notes Class 17 Dilutive...

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M351 Notes, Class 17: Dilutive Securities and EPS, pages 792-806 Today’s topics: Calculating earnings per share? What if dilutive securities were converted into common equity? A. Per share amounts are presented as needed for (see Illustration 16-7 on page 793): Income from continuing operations, net of tax Gain or loss from discontinued operations Income before extraordinary items Extraordinary gain or loss, net of tax Net income B. Basic earnings per share is: (Net income - Preferred dividends)/weighted average shares outstanding C. The number of shares outstanding changes when: 1. Common stock is issued (including exercise of stock options, conversion of convertible preferred or convertible debt, issue stock for cash, property, debt or equity securities of other companies) 2. Treasury stock is acquired or sold 3. Stock dividends and Stock splits change shares outstanding from the beginning of the year D. A schedule for calculating weighted average shares outstanding should have the following columns (see Illustration 16-12 on page 795): Dates Shares Fraction Outstanding Outstanding Restatement
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Class17 - Dilutive2 - M351 Notes Class 17 Dilutive...

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