Earnings Per Share

Question 1

EPS - only for public entities

Answer 1

; no ASPE, non public don’t need to report EPS

Question 2

Basic EPS

Answer 2

O/s shares during the year

Net earnings available to common shareholders/Weighted ave. common shares o/s

Question 3

Diluted EPS

Answer 3

hypothetical measure of earnings
Basic eps + shares that had the potential to be o/s during the year
1. calc. Basic EPS
2. find the potential o/s
3. each class of 2. calc. the change in income(if convertible bond = carrying valueeff. int rate1-taxrate) /additional shares

Question 4

Net earnings available to common shareholders

Answer 4

Net income less preferred shares dividends (cumulative; less those owed in the year)
(non-cumulative; only those declared)

Question 5

Weighted ave. common shares o/s

Answer 5

share o/sadj. factortime period

Question 6

which stock options are considered in diluted EPS

Answer 6

those in the money

Question 7

Treasury stock method:

Answer 7

eps incremental income impact is nil for stock options but share impact due to dif between money rec. and what can be reacquired in the mkt.
=stock options o/s*(ave m.p-trading price)/market price
most dilutive = 0