[Verse 1] When a company has more than just basic shares Convertible bonds and options everywhere We need to calculate what earnings could be If all securities convert potentially [Chorus] Diluted EPS, show the worst case scene If-converted method, treasury stock machine Anti-dilutive means it makes things better Leave it out, don't make EPS lesser [Verse 2] Start with basic EPS as your foundation Add back interest saved from bond conversion Increase the shares outstanding in your math Check if dilution's on the right path [Chorus] Diluted EPS, show the worst case scene If-converted method, treasury stock machine Anti-dilutive means it makes things better Leave it out, don't make EPS lesser [Verse 3] Stock options use treasury stock approach Calculate shares that new cash can't reproach Take proceeds, buy back shares at average price Net new shares make earnings slice [Bridge] Complex capital structures need more care Sequence your calculations, compare and prepare Most dilutive securities first in line Test each one to see if they're benign [Chorus] Diluted EPS, show the worst case scene If-converted method, treasury stock machine Anti-dilutive means it makes things better Leave it out, don't make EPS lesser [Verse 4] Warrants work just like the options do Exercise price versus market value If the stock price is trading way below Those warrants are anti-dilutive, let them go [Outro] From basic shares to complex securities Diluted EPS shows true realities Protect investors with the clearest view Dilution calculation sees you through
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