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Treasury Stock Method CalculatorDilutive Shares from Options and Warrants

What do these figures come to once the work is shown?

Incremental shares from options by the treasury stock method, with basic and diluted EPS and an antidilution flag.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Diluted EPS
0.41
Net income over basic shares plus incremental option shares
Basic EPS
0.42
Incremental shares
320,000.00
Drawn to one scale
Diluted EPS0.41
Basic EPS0.42
Incremental shares320,000.00
Shares repurchased with proceeds480,000.00
All results
MeasureResult
Diluted EPS0.41
Basic EPS0.42
Incremental shares320,000.00
Shares repurchased with proceeds480,000.00
ResultDilutive: options are in the money
How this was worked out
Work shownrecomputed as you type
Proceeds = options x exercise price
Shares repurchased = proceeds / average market price
Incremental shares = options - shares repurchased (zero if market price <= exercise price or net income is not positive)
Diluted EPS = net income / (basic shares + incremental shares)

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Proceeds = options x exercise price
  • Shares repurchased = proceeds / average market price
  • Incremental shares = options - shares repurchased (zero if market price <= exercise price or net income is not positive)
  • Diluted EPS = net income / (basic shares + incremental shares)

How it works

The treasury stock method assumes options are exercised at the start of the period and that the cash received is used to buy back stock at the average market price. Only the net new shares dilute EPS.

Options with an exercise price above the average market price would not be exercised, so they are left out as antidilutive. In a period with a net loss every potential share is antidilutive and is left out. Use the average price for the period, not the closing price. Share-based awards with unrecognized compensation cost add to assumed proceeds, which this simple version does not include.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Which price should I use?

The average market price during the period.

Why are out-of-the-money options excluded?

Including them would raise EPS, which is antidilutive.

Does it cover unvested awards?

Not fully. Assumed proceeds for unvested awards include unrecognized compensation cost, which is not modeled here.

Formulas on this page are the standard definitions.

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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