Effect of Stock options on dilutive eps if they were granted mid year

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  • July 26, 2015 at 4:46 pm #195646
    Mikep057812
    Member

    Hi,

    Quick questions. If option is created mid year, and the net increase of stock in the numerator after considering treasury stock effect is, let’s say, 500. Do you need to divide it by 6/12? or you count the whole 500?

    thanks in advance.

    FAR - 87 - 08/2015
    AUD - 11/2015
    REG - 05/2016
    BEC - 08/2016

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  • July 26, 2015 at 5:42 pm #683976
    Anonymous
    Inactive

    You assume they were exercised at the issue date if that's later than the beginning of the period. I double-checked my Becker book to be sure.

    In that case, the increase to WACSO would be divided by 6/12 in your example. I wouldn't expect to see that on the exam though!

    July 26, 2015 at 7:36 pm #683977
    Mikep057812
    Member

    thanks !

    FAR - 87 - 08/2015
    AUD - 11/2015
    REG - 05/2016
    BEC - 08/2016

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