Thursday Jan 14, 2009
Jean Jennings, editor of Automobile, announced that Ford will overtake Toyota as the number two automaker. Well, what about the $25 B in debt Ford has?
We study earnings per share and potential dilution in Intermed II. This article points out that Ford has granted 362 million warrants which can be exercised at $9.20. The stock is two bucks above that which means the warrants or call options are in the money. That means the warrants can be exercised. That would instantly create more shares. That would dilute earnings on a fully diluted basis.
Mastering accounting makes the business news much easier to read and understand.
Professor Elam 
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