Posts: 5
Joined: Wed Jan 30, 2013 10:36 am


Postby sairamu217 » Wed Jan 30, 2013 10:41 am

calculation of diluted eps.

for 8 qn in slide no 30 of fsa II answer is specified in slide no 32.

there in the calculation of denominator its mentioned as (100-(100*50/75)).

100 is warrants 75 is avg price but how did we get 50 while 100 was the strike price?

and warrants are antidilutive in this question. so why are they used in calcualtion of denominator when they are not involved in numerator?

User avatar
Finance Junkie
Posts: 83
Joined: Thu Jul 19, 2012 6:49 pm


Postby shreyas » Fri Feb 01, 2013 12:13 pm

The question is incorrect and thanks for making us note of it.

Warrants are not exercised until the market price doesn't cross the exercise price. Also the securities are anti-dilutive when they increase the EPS when converted to common stock.

Return to “CFA Level II”



Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to abuse@edupristine.com and we will rectify it.