What's New at CFI | Accounting for Diluted Shares

In this episode of What’s New at CFI on FinPod, we dive into the complexities of calculating diluted shares, including how various factors—such as stock options, convertible debt, and restricted stock—affect a company’s share count. We explain how failing to account for potential shares that could be issued (like employee stock options or convertible debt) can lead to overvaluing a company’s equity. By breaking down the differences between basic shares outstanding and fully diluted shares, we can begin to see how these complexities can impact financial valuations. We also discuss ho...