when calculate diluted EPS, if there prefered convertible stock, should we add the divdend payment from these prefered convertible stock back to the earnings? Thanks.
Y add… u would want to subtract them
for diluted eps you don’t do anything with the earnings since they are not substracted yet from net income
Sorrry i was talking with respect to basic… mind is knda switched off… need to go sleep
we all need to go to sleep 
too much
Diluted EPS calculation for convertible preferred stock ,using if converted method, you should not subtract the preferred dividends in the numerator, and increase the denominator with the number of common shares they convert to.
agree with above. you don’t subtact preferred divs from NI (in the numerator) b/c you assume the preferred shares are being converted to common shares. so no pref shares anymore, no pref div payout.
just be careful that it is ‘convertible’ preferred and not just plain old preferred. for the latter, you still need to subtract the preferred dividends from NI
just want to make sure I get all the point. If not substract from net income, we also don’t need to add it back to net earnings, is it? when they give you the net earnings, dose it already substracted the divident payment from prefered convertible stock? or not? thanks. or, when we say “net income”, it dose not include any divident payment yet, is it? Thanks. Dsylexic Wrote: ------------------------------------------------------- > just be careful that it is ‘convertible’ preferred > and not just plain old preferred. for the latter, > you still need to subtract the preferred dividends > from NI
there might be 2 types of pref stock- convertible & non convertible. since u would have already deducted total pref div from NI while calc basic, it would be convenient to just add back the div from convertible portion
net income is prior to div payments