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welcome to this session in which we will discuss diluted earnings per share using the treasury method now before we talk about diluted earnings per share i want to make sure you have a good understanding of basic earnings per share if not stop and go to the prior session to view the recording about basic earnings per share also we have another method for diluted earnings per share and that is what if or the if method we looked at that method in the prior session so when do we have to compute diluted earnings per share simply put itamp;#39;s when we have complex capital structure what is that what is a complex capital structure itamp;#39;s when you have securities that are dilutive in nature such as convertible securities such as convertible bonds convertible preferred stock options warrant or other rights that could be converted into common stock if those securities are converted thereamp;#39;s a potential dilution effect on eps so letamp;#39;s compute basic eps or earnings per sha