Student Edwin question

"What the difference between basic and duilted EPS? When calculating PE, which one should we take? Thank you."

My answer:
Use the smallest available number, which is diluted eps. The basic EPS is the earnings divided by number of stocks they have during the IPO launch. After that, it is very common that companies issue shares to raise more capital.

Just remember always use smallest available eps no. for calculation of PE (conservative approach). Unless you are analysing historical prices, then use the older eps(you will never do that actually as it doesn't make sense you analyse past prices)