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Basic FM: Income Statement
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Diluted earnings per share
I'm confused on why you added 1080 to net income in 2002 to get diluted EPS but didn't add anything to net income in 2003 to get diluted EPS. From my understanding, in Part 2, you said that the company had to pay $1080 worth of interest to the convertible subordinate shareholders if they did not con...
I'm confused on why you added 1080 to net income in 2002 to get diluted EPS but didn't add anything to net income in 2003 to get diluted EPS. From my understanding, in Part 2, you said that the company had to pay $1080 worth of interest to the convertible subordinate shareholders if they did not convert their debt into common stock. In 2002, we assumed that they did convert there stock, so diluted EPS =(net income + 1080)/diluted shares outstanding. Then, in part 4, for diluted EPS in 2003 you said that we did not need to account for the 1080 because the "Phoenix Companies converted all of the Company's Convertible Subordinated Debentures into common stock" (from F-13 of the 10k). Doesn't this mean that the company didn't need to pay $1080 and would therefore have to add it back to net income?
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by Lucy R.
added 7 years ago
