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Diluted Earnings Per Share | Convertible Preferred Shares [Video]

Diluted Earnings Per Share | Convertible Preferred Shares

Preferred stock can affect the calculation of basic earnings per share (EPS) because preferred dividends are subtracted from net income when calculating earnings per share. But CONVERTIBLE preferred stock can also affect DILUTED earnings per share if those convertible preferred shares are convertible into common shares.

To calculate diluted earnings per share when there are convertible preferred shares outstanding, you need to do two things:

(1) Don’t subtract preferred dividends for the convertible preferred shares from net income in the numerator of the diluted EPS equation (with diluted EPS, you’re assuming the preferred shareholders would have converted their shares to common shares, and thus the company wouldn’t have had to pay preferred dividends)

(2) Add the number of common shares that the preferred shareholders will be receiving (with diluted EPS, you assume the preferred shareholders would have converted their preferred shares to common shares at the beginning of the period, and that the company issued new common shares to satisfy the conversion)

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Negotiation skills: Creative Problem Solving in Negotiation [Video]

Negotiation is a complex and often challenging process that requires you to find solutions that satisfy both parties involved. While traditional negotiation tactics focus on reaching compromises, creative problem solving takes negotiation to the next level by exploring innovative solutions that can lead to win-win outcomes. In this guide, you will learn how to harness your creative problem-solving skills to become a more effective negotiator.Get free business and management guides, tools, and worksheets at: https://www.bizmove.com

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Finance for Non-Finance Master Business Finance Without Prior Knowledge! [Video]

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WallStreetMojos Valuation Course Ultimate gateway to mastering company valuation from scratch! [Video]

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Build Expert-Level Models with WallStreetMojo's Course! [Video]

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