Dividend per share=Common share dividends/weighted ave. number of ordinary shares EBITDA per share=EBITDA/Ave number of common stock. Why are these denominators different? Both are per share ratios…
I don’t understand minocfa mean denominators different what? Difference in terminology in denominators or difference in the method of computerizing? I also get confuse here, has ordinary share the same meaning with common share or common stock? Anybody make it clear pls!
its not computerizing.
I think they should both be meaning the same as weighted avg
its simply due to the different uses of the calculations and who is uses them. The Div/Share formula with the weighted ave is what a COMPANY USES to calculate the div payment to each shareholder. Since being more accurate is important and since the company is actually executing a corporate action (i.e distributing cash), the weighted average is used (and I would also suspect that this method is probably required by some regulating authority) the EBITDA/share is an ANALYST’S TOOL to estimate operating performance, so a quicker method of simply using the average shares from the beginning of the year to the end is a reasonable method to use. as an analyst, you can use any myriad of ratios (many never mentioned in the CFA material), it is really up to the discretion of the analyst regarding what information they’re trying to capture.
Thanks Char-Lee for yr explain
This weighted average is calculated as it is in EPS calculation, right?
yes