Misconception · MIS:incremental-earnings-per-share-is-a-shortcut

Mistaken idea “The instrument with the most shares is most dilutive”

Mistaken reasoning: This mistake assumes that the instrument with the most shares is most dilutive.

Updated Sep 11, 2026 Review due Dec 11, 2026

Why this is mistaken

The instrument with the most shares is most dilutive. Order instruments by incremental numerator divided by incremental shares, calculated at full precision.

Where to watch

When this mistake may appear

  • The arithmetic produces a lower per-share amount.
Check your work

Your work may contain this mistake if:

  • Accepts the quotient without tracing the numerator, dated shares, instrument method, and antidilution control.