Complex capital structure

A business has a complex capital structure when it has issued other types of equity than just common stock. For example, the organization may have issued preferred stock or several classifications of common stock, each one having different voting rights and other privileges. It may have also issued stock warrants and options, and there may be several types of callable bonds or convertible bonds. A startup company commonly develops a complex capital structure over time, as it goes through multiple rounds of financing. If the business ever goes public, it cleans up this capital structure by converting its various classifications of stock into common stock. When a firm has a complex capital structure and is publicly held, it must report its fully diluted earnings per share.

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Treasurer's Guidebook