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Basic Question 32 of 40
When considering the impact of warrants on earnings per share, the method to calculate the number of shares added to the denominator is derived using which method?
B. Treasury stock method
C. Cost recovery method
A. Weighted average method
B. Treasury stock method
C. Cost recovery method
User Contributed Comments 1
| User | Comment |
|---|---|
| kalps | On exercise the treasury method assumes that the proceeds are used to buy back the stock in the market at the market price. Only dilutive if the market price is greater than conversion price and realistically will only be converted if this is the case |
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Andrea Schildbach
Learning Outcome Statements
describe how earnings per share is calculated and calculate and interpret a company's basic and diluted earnings per share for companies with simple and complex capital structures including those with antidilutive securities
CFA® 2024 Level I Curriculum, Volume 2, Module 2.