Dilutive security

Dilutive securities are financial instruments like stock options, warrants, convertible bonds, etc. which increases the number of common stock, if exercised. It reduces the basic EPS (earnings per share).[1] Only if the diluted EPS is less than the basic EPS then it is called dilutive securities.[2]

References

  1. ↑ Donald E. Kieso; Jerry J. Weygandt; Terry D. Warfield (4 October 2010). Intermediate Accounting: IFRS Edition. John Wiley & Sons. p. 822. ISBN 978-0-470-61631-4.
  2. ↑ Eugene F. Brigham; Phillip R. Daves (24 February 2012). Intermediate Financial Management. Cengage Learning. pp. 781–. ISBN 1-111-53026-2.


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