Describe the different between Undiluted Earnings Per Share versus Diluted Earnings Per Share. Which is a...
Describe the different between Undiluted Earnings Per Share versus Diluted Earnings Per Share. Which is a more accurate estimation of EPS over the long term and why?
Homework Answers
Diluted Earnings per share takes into the account the
convertible bonds or preferred stock. This increases in the number
of shares and dilutes earnings too,
Undiluted Earnings per share does not take into account the
convertible bonds and convertible preferred stock.
Accurate estimation is diluted earnings per share because it takes
into actual earnings and the increase in shares. Hence diluted
earnings per share might be lower than traditional earnings per
share.
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Describe the different between Undiluted Earnings Per Share
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