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When asked about the disadvantages of parenthood, Americans and Europeans most often cite
Potential Dilutive Effect
The possible impact on a company’s earnings per share if convertible securities were converted into common stock, often considered in financial analysis.
If-Converted Method
A calculation technique used to assess the impact on diluted earnings per share if all convertible securities were converted into common stock.
Convertible Securities
Financial instruments, such as bonds or preferred stocks, that can be converted into a predetermined number of common stock or equity shares.
Diluted Earnings
The reduced earnings per share figure when considering the conversion into common stock of all potential shares that could dilute earnings.
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