false

Question

Why 75000 shares were reduced from 1,00,000 shares?

Vignesh · Answer

Clearly understood. Thank you very much 🙏

Nagaraju · Answer

I am replying in phone. Typing on the app usinh mobile phone is difficult, still tried my best. Hope you understood..

Nagaraju · Answer

This is Question of Options. In such calculation of Diluted EPS, it is considered that 2 classes of Equity Shares are issued 1. Equity Shares at the average fair value. In this case, the shares are not included in the computaion of Diluted EPS as there is no Bonus Invlovement. 2. Remaining Shares are considered to issued for free, here there is bonus element and therefore included in Computation of Diluted EPS. So, in options there 1,00,000 shares at issue price of 15 (15,00,000 Proceeds). If the shares were issued at Fair value 75000 shares would be enough to generate 15,00,000 of proceeds. Therefore, only additional shares of 25000 (Carriying Bonus Element) are included in Computation of Diluted EPS (Excluding those 75000 which were assumed to be issued at Fair Value)

Vignesh · Answer

@harpeet kaur - can you explain how the increase is only 25,000 shares?

Harpreet · Answer

75000 are reduced as shares will only increase by 25000 and not 75000

false

5 answers

Ask your doubt in the Studycaller app