Dilution Template

Over 2.8 million + professionals use CFI to learn accounting, financial analysis, modeling and more. Unlock the essentials of corporate finance with our free resources and get an exclusive sneak peek at the first module of each course. Start Free

Dilution Template

This dilution template helps you identify the impact of dilutive securities on the share price.

Here is a preview of the dilution template:

Dilution Template Screenshot

Download the Free Template

Enter your name and email in the form below and download the free template now!

* By submitting your email address, you consent to receive email messages (including discounts and newsletters) regarding Corporate Finance Institute and its products and services and other matters (including the products and services of Corporate Finance Institute's affiliates and other organizations). You may withdraw your consent at any time.

This request for consent is made by Corporate Finance Institute, #1392 - 1771 Robson Street, Vancouver, BC V6G 3B7, Canada. www.corporatefinanceinstitute.com. [email protected]. Please click here to view CFI`s privacy policy.

Dilution can be caused due to a number of dilutive securities such as stock options, restricted and performance stock units, preferred stock, warrants, and convertible debt. Dilution may cause the share price to decline because dilution reduces the company’s earnings per share (EPS). The extent of decline depends on the percentage of dilution. Given basic shares outstanding, share price, and information of dilutive securities, we can calculate dilution using the treasury stock method, and use the diluted number of shares outstanding and the market capitalization of the company to calculate its new share price.

Step 1: Calculate the diluted number of shares outstanding using the treasury stock method.

Step 2: Calculate the diluted shares outstanding by adding the additional shares issued due to dilution to the basic shares outstanding.

Step 3: Divide the market capitalization of the company by the diluted shares outstanding to arrive at the new share price of the company.

More Free Templates

For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentation, and Word document templates.

Excel Tutorial

To master the art of Excel, check out CFI’s Excel Crash Course, which teaches you how to become an Excel power user. Learn the most important formulas, functions, and shortcuts to become confident in your financial analysis.

Launch CFI’s Excel Crash Course now to take your career to the next level and move up the ladder!

0 search results for ‘