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Diluted earnings per share
(redirected from Diluted EPS)

    Also found in: Wikipedia 0.07 sec.
diluted earnings per share
An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of common stock. Net income is adjusted for any changes that would occur because of the conversions. Diluted earnings per share is a particularly effective method of presenting earnings-per-share data for companies with complex capital structures. Compare basic earnings per share. See also dual presentation.

Diluted earnings per share. In addition to reporting earnings per share, corporations must report diluted earnings per share. This accounts for the possiblity that all outstanding warrants and stock options are exercised, and all convertible bonds and preferred shares are exchanged for common stock.

Diluted earnings actually report the smallest potential earnings per common share that a company could have based on its current earnings. In theory, at least, knowing the diluted earnings could influence how much you would be willing to pay for the stock.



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Stock subscriptions that are partially paid and do not share in dividends until fully paid are treated like warrants and included in diluted EPS using the treasury stock method, discussed later.
Simplifying EPS by Luecke, Randall W. / Journal of Accountancy
Under the FASB's tentative conclusions, fully diluted EPS would be replaced with diluted EPS.
The FASB and the IASC redeliberate EPS by Read, William J. / Journal of Accountancy
8 million and normalized diluted EPS from continuing operations was $0.
Premiere Global Services Reports Second Quarter Results; $125.6M in ... by Business Wire
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