The Effects of Blending Primary and Diluted EPS Data

10 Pages Posted: 12 Jul 2015

See all articles by Ralph Goldsticker

Ralph Goldsticker

affiliation not provided to SSRN

Pankaj Agrrawal

University of Maine

Date Written: 1999

Abstract

The paper predicted in 1999 that the growth rates of technology companies was overstated. Once the executives of these companies would exercise their stock options, the blending of primary and diluted EPS would lower the estimated growth rates. Valuations would subsequently get adjusted (downwards) by the market. This happened over the 2000-2003 bear market. A similar adjustment is now used in the Returnfinder app's algorithm, which provides dual returns for the ticker entered.

Keywords: earnings, dilution, stock options, EPS, FASB, 1997, IBES

Suggested Citation

Goldsticker, Ralph and Agrrawal, Pankaj, The Effects of Blending Primary and Diluted EPS Data (1999). Financial Analysts Journal, Vol. 55, No. 2, 1999, Available at SSRN: https://ssrn.com/abstract=2629520

Ralph Goldsticker

affiliation not provided to SSRN

Pankaj Agrrawal (Contact Author)

University of Maine ( email )

Orono, ME 04469
United States

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