Management and Organizational Studies 3361A/B Lecture 17: Chapter 17 Lecture Notes.docx

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3361A/B
• Professor: Michelle Loveland

Document Summary

Weighted average # of common shares outstanding: preferred dividends that should be deducted: (2 types, if preferred shares are non cumulative, deduct only declared dividends, if preferred shares are cumulative, deduct only declared dividends or if no dividends declared, deduct current cumulative dividend not declared (that year"s obligation only, eps is to show in the current year so if you start deducting for dividends in arrears then it"s not a good number. Earnings per share complex capital structure: corporation has dilutive type of securities which has potential to decrease earnings per share when converted to equity if they have, convertible bonds, convertible preferred shares, warrants, rights, options, contingent shares, all the above requires dual presentation of earnings per share: basic and diluted, when you"re doing diluted eps it doesn"t matter when they were converted, it doesn"t matter anymore, takes in to account the impact on earnings per share that occurs if, convertible securities are exercised (if convertible method)