Fully Diluted Earnings Per Share Law and Legal Definition
Fully diluted earnings per share also written as fully diluted EPS means a corporation’s net income fractioned by the number of shares of the corporation’s outstanding common stock. Fully diluted earnings per share are calculated on the assumption that all convertible securities of the corporation had been transferred to common equity and all stock options had been exercised by the corporation. It serves as the most appropriate way of looking at earnings on a per share basis of a firm that has a lot of stock options, warrants, convertible bonds and preferred stocks outstanding.
