BU227 Lecture : Chapter 12
Document Summary
The number of issued shares may differ from the number of outstanding shares if the company has bought back some (treasury) of its shares from shareholders. When the options are exercised, bce receives per common share, while it could obtain a higher price if it sold the same shares in the market to other investors. Clearly, the exercise of employee stock options entails a cost to bce that should be measured and reported. Canadian companies must estimate and report compensation expense associated with stock options. Measure of the return on investment that is based on the number of shares outstanding instead of the dollar amounts reported on the statement of financial position. All analysts and investors are interested in a company"s earnings. You have probably seen newspaper headlines announcing a company"s earnings. Notice that those news stories normally report earnings on a per share (eps) basis. Numbers are much easier to compare on a per share basis.
