Question

When is a company required to show diluted earnings per share? a) Always b) Only when...

When is a company required to show diluted earnings per share?

a) Always

b) Only when diluted earnings per share is less than basic earnings per share.

c) Only when diluted earnings per share is greater than basic earnings per share.

d) Only if the company has other comprehensive loss.

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Homework Answers

Answer #1

b) only when diluted earnings per share is less than basic earnings per share.

Explanation -

Diluted earnings per share will be shown only when it is less than or equal to basic earnings per share. In case of Diluted earnings per share is more than basic earnings per share than it is called Anti dilutive. And anti dilutive EPS are not shown in financials.

So in the given options, b option is correct because Diluted earnings per share is less than basic earnings per share.

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