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Theory, Pragmatism and Conservatism in Reflecting the Effects of Warrants on Diluted EPS
Author(s) -
BARLEV BENZION
Publication year - 1984
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/j.1467-6281.1984.tb00188.x
Subject(s) - conservatism , earnings , pragmatism , accounting , economics , dilution , actuarial science , econometrics , financial economics , philosophy , political science , law , epistemology , thermodynamics , physics , politics
The American, British and Canadian professional accounting bodies have prescribed methods for calculating earnings per share which are materially different. The aim of this paper is to determine which of the three methods is most compatible with finance theory with particular reference to the effects of dilution. Only the Canadian method can be shown to be theoreticaly sound.