Terms Beginning With 'd'

Diluted Earnings per Share

  • January 29, 2020
  • Team Kalkine

A profitability calculation which is used to gauge the amount of income received by each share if all convertible securities were exercised, is termed as Diluted Earnings per Share. Besides taking into consideration the existing common stock, the measure assumes that all the securities including stock options, convertible bonds, warrants, convertible preferred shares, etc., which can be modified into common stock are actually altered.

Diluted EPS can be calculated by dividing the difference of total income and preferred dividends with the sum of outstanding and diluted shares.

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