When computing diluted EPS for a company with a complex capital structure,what is the denominator in the computation?
A) Number of common shares outstanding at year-end
B) Weighted-average number of common shares outstanding
C) Weighted-average number of common shares outstanding plus all other potentially antidilutive securities
D) Weighted-average number of common shares outstanding plus all other potentially dilutive securities

Question

Quizplus · Accepted Answer

When computing diluted EPS for a company with a complex capital structure, the denominator in the computation is the weighted-average number of common shares outstanding plus all other potentially dilutive securities. This includes any securities that could potentially dilute the value of existing shares, such as stock options, convertible bonds or preferred shares that can be converted into common shares.

When Computing Diluted EPS for a Company with a Complex