Reply to "An Option-Theoretic Argument Favoring EPS Dilution Over Holding Gain/Loss"

Donald E. Wiseman

doi:10.2308/ah-9604083360

June 1, 1992Accounting Horizons

Reply to "An Option-Theoretic Argument Favoring EPS Dilution Over Holding Gain/Loss"

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Key Points

The piece addresses feedback on the author's view of EPS dilution accounting related to option-like securities.
Critical evaluation of Cheung's EPS dilution model
Discussion on accounting validity
Analysis of risk/return potential for options
Explores the implications of EPS dilution accounting methods
Highlights the need for reevaluation of existing models
Suggests enhancements to the approach for option-like securities

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Implication

Opinion piece evaluates EPS dilution models and their validity in accounting for option-like securities, indicating potential improvements.

Abstract

Opinion. Presents the author's reply to a commentary by Joseph Cheung regarding the author's article on the treatment of option-like securities in EPS calculations. Validity of EPS dilution accounting; Evaluation of the usefulness of Cheung's EPS dilution model; Risk/return potential of the option.

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Donald E. Wiseman (1992) studied this question.

synapsesocial.com/papers/6a2f98a0a1cfeec490829b35 https://doi.org/10.2308/ah-9604083360

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Reply to "An Option-Theoretic Argument Favoring EPS Dilution Over Holding Gain/Loss"

Key Points

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Discussion

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Reply to "An Option-Theoretic Argument Favoring EPS Dilution Over Holding Gain/Loss"

Key Points

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Implication

Abstract

Discussion

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