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Hello Sir,
In the context of diluted EPS, I would like you to give me an example of the following line and explain why this happens.“A separate class of equity shares which at present is not entitled to any divided, but will be entitled after some future date”.
Thanks!
Hi,
It is quite literal in that the company has in issues some equity shares that do not give the owner the right to a dividend. There will be terms/conditions then attached that after a particular date the owner will be entitled to a dividend. It is likely to be the case with smaller/start up businesses that want to attract equity investment but won’t have the cash flow initially to pay a dividend but will do at some point in the future.
Thanks
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