Restricted stock awards : These are the shares which are granted in the name of the employee but the ownership is retained by company. But the employee possesses the rights as shareholders, with some restriction on forfeiture. Earnings per share (EPS) : The amount of earnings made available to each common share is referred to as earnings per share. Dilutive securities like convertible bonds, convertible preferred stock , and stock options, reduce the EPS by increasing the common shares. Use the following formula to determine EPS: Earnings per share } = Earnings available to common shareholders Weighted average number of common shares outstanding = Net income –Preferred dividends Weighted average number of common shares outstanding To determine : The net increase in denominator of EPS

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Chapter 19, Problem 19.16BE

To determine

Restricted stock awards: These are the shares which are granted in the name of the employee but the ownership is retained by company. But the employee possesses the rights as shareholders, with some restriction on forfeiture.

Earnings per share (EPS): The amount of earnings made available to each common share is referred to as earnings per share. Dilutive securities like convertible bonds, convertible preferred stock, and stock options, reduce the EPS by increasing the common shares.

Use the following formula to determine EPS:

Earnings per share} = Earnings available to common shareholdersWeighted average number of common shares outstanding= Net income –Preferred dividendsWeighted average number of common shares outstanding

To determine: The net increase in denominator of EPS

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