Chapter 21
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12 Terms
Basic earnings per share
= Net income available to common stockholders / Weighted-average common shares outstanding
Weighted-Average Shares Outstanding
= SUM(Actual Shares Outstanding x Percentage of Full Year)
What effect on diluted EPS calculation of convertible bonds have on the numerator?
add back interest expense, net of tax
What effect on diluted EPS calculation of convertible preferred stock have on the denominator?
add new common shares
What effect on diluted EPS calculation of stock options and warrants have on the numerator?
no effect
What effect on diluted EPS calculation of stock options and warrants have on the denominator?
add incremental common shares
incremental common shares(stock options & warrants)
= new shares - (cash / Avg market price per share)
What effect on diluted EPS calculation of unvested restricted stock have on the numerator?
no effect
What effect on diluted EPS calculation of unvested restricted stock have on the denominator?
add incremental common shares
incremental common shares (unvested restricted stock)
= New shares - (Unearned compensation / Avg market price per share)
What effect on diluted EPS Calculation of Contingently Issuable shares have on the numerator?
no effect
What effect on diluted EPS calculation of contingently issuable shares have on the denominator?
add new common shares meeting criteria
Note 
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