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Diluted EPS

Accountancy

In this question, it is given that potential shares will rank for dividend from 2020. So, why will it dilute EPS in 2017-18?

Raviteja Kusumanchi

CA Final

★ 24K+

29-Sep-20 20:00

350

Answers (4)

Best Answer

Thread Starter

Raviteja Kusumanchi

But it will not happen in next 2 years which implies that the earnings will not have impact for atleast 2 years, so can we consider it to be not diluted for those 2 years?

Dividend will not be paid. But if the potential shares are converted, the earnings per share will be reduced.

CA Suraj Lakhotia

Admin

30-Sep-20 06:45

Potential is futuristic. Also it is with respect to share in earnings.

CA Suraj Lakhotia

Admin

29-Sep-20 20:10

But it will not happen in next 2 years which implies that the earnings will not have impact for atleast 2 years, so can we consider it to be not diluted for those 2 years?

Thread Starter

Raviteja Kusumanchi

CA Final

★ 24K+

29-Sep-20 20:17

Okay sir. Thank you

Thread Starter

Raviteja Kusumanchi

CA Final

★ 24K+

30-Sep-20 08:15