Publicly traded firms have the option either offer dilutive anti- to or
dilutive convertible securities. Dilutive convertible securities are
typicallystock options and convertible bonds which can increase the
total number common shares when exercised. result, the of As a
earnings per share reduced (Woronoff Rosen, 2005). the get & On
other hand, anti-dilutive convertible securities safeguard
shareholders from such dilutions sincethe total number of
outstanding shares remains constant, and there is no decline the in
earnings per share (EPS).The information relating dilutive and anti- to
dilutive convertible securities paramount importance for is of
shareholders since they are able get insight into whether the to an
EPS the business entity has declined not. Since the diluted EPS of or
is generally lower than the basic EPS, shareholders prefer anti-
dilutive convertible securities over dilutive convertible securities.
Generally, shareholders resist the dilution shares since devalues of it
or reduces the value their existing stake. addition this, dilutive of In to
convertible securities reduce the earnings share business per of a
