Financial Modeling
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In the beginning, Mr. Lin assumed that the diluted share outstanding in 2006 equals to that in 2005 in IS and then calculated EPS. Next, he used projected diluted EPS from IS to calculate the repurchased shares in CF and then calculated the basic shares outstanding for the purpose of calculating the dividends. Nest, he used the basic shares outstanding to recalculate the diluted shares outstanding in IS. I hope that I understand this correctly.
My question is why not to use basic EPS in IS to calculate the the basic shares outstanding in CF? Read More