WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 247.42

-11.2%

12:55 PM EST

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To: Art Bechhoefer who wrote (24758)	1/26/2004 10:17:27 PM
From: Andre Williamson	Read Replies (1) of 60323

Art, I think that in this case, callable note simply refers to a convertible bond. You're right, it would be included in diluted EPS as if already converted: The method for accounting for each type of dilutive security in the diluted EPS calculation is different. For example, convertible bonds are handled via the "if converted" method, which assumes that outstanding convertible bonds are converted into common stock at the start of the measurement period (e.g., Jan. 1 for a company that reports its financials on a calendar-year basis). In this case, the numerator goes up by the aftertax amount of interest saved by having converted the bonds, and the denominator goes up by the number of shares created through the conversion. poweredby.morningstar.com There would be dilution here, but don't these generate cash for Sandisk when converted? I thought the strike was around $20/share. Andre

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