EPS - Preferred Shares include, about

MeteorShower

hi,

why do you deduct preferred share dividends from numerator but not include the shares in the denominator? (I'm not talking about convertible pfds).

dotamasta

EPS is meant to be calculated for what part of earnings is available for common shareholders. Hence preferred dividend has to be deducted from the numerator.

You will include preferred shares back to denominator (and add preferred dividend back to numerator) if those are dilutive.

evolsteevol

got it. thanks.