2024 CFA Level I Exam: CFA Discussion Topic: About Diluted EPS

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Topic: About Diluted EPS

Author	Topic: About Diluted EPS
CoolAlan @2005-11-19 08:01:48	I found that the definition of Diluted EPS is contradicting. Some said assume that all the convertibles and options should be assumed to exercise at the average price while the others said it is only exercised when it creates dilusive effects. Please share thoughts on this. And there is also another concept called primary EPS which some said to be Diluted EPS (as the second definition) and others said it is same as basic EPS. I am confused.
memphisbanker @2005-11-23 12:22:51	convertibles are included in diluted EPS when they have a dilutive effect by themself. Options are exercised if exercise price is less than avg. price for the year, options only add shares to the denominator. Primary EPS=Basic EPS

Author

Topic: About Diluted EPS

CoolAlan
@2005-11-19 08:01:48

I found that the definition of Diluted EPS is contradicting. Some said assume that all the convertibles and options should be assumed to exercise at the average price while the others said it is only exercised when it creates dilusive effects. Please share thoughts on this. And there is also another concept called primary EPS which some said to be Diluted EPS (as the second definition) and others said it is same as basic EPS. I am confused.

memphisbanker
@2005-11-23 12:22:51

convertibles are included in diluted EPS when they have a dilutive effect by themself. Options are exercised if exercise price is less than avg. price for the year, options only add shares to the denominator. Primary EPS=Basic EPS

CFA Discussion Topic: About Diluted EPS

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CFA Discussion Topic: About Diluted EPS

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