Chapter 16:
- Options
- Forward contracts
- Complex financial instruments (debt & equity)
- Compensatory stock option plans
Chapter 17:
- Earnings per share
- Earning (Common share) / Weighted average C/S outstanding
- EPS for simple capital structure
o C/S
o P/S
- EPS for complex capital structure
o C/S
o P/S
o Convertible instruments
If P shares are cumulative
- If not paid, you owe them
If dividend is not declared and P shares are cumulative, deduct the current year only for the P
share.
We need to find out what the income is available for common shares
2 scenarios:
1. No dividend declared
2. Dividend declared
Weighted Average Number of Shares Outstanding (do this in a table):
Columns:
- Transaction
- Total number of shares
- From when to when
- # of months
- Weighted average
Stock splits and stock dividends affect all prior transactions via a multiplier