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Which of the following is always true:
A) Diluted weighted shares is always less than or equal to basic weighted average shares
B) Diluted weighted shares is always greater than or equal to basic weighted average shares
C) Shares outstanding on the period end date is the value used to calculate Basic EPS
D) Shares outstanding on the period end date is the value used to calculate Diluted EPS

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Zviko

Answer:

B) Diluted weighted shares is always greater than or equal to basic weighted average shares

Explanation:

Basic Earnings per Share = Earnings Attributable to Holders of Common Stock ÷ Weighted Average Number of Common Stocks

Diluted Earnings per Share includes the Potential voting rights in the calculation of Weighted Average Number of Common Stocks and thus its weighted shares is always greater than or equal to basic weighted average shares.

Earnings per Share used Weighted Shares Outstanding at Period End instead of just Outstanding Shares at Period End.

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