# Weighted Average Shares Outstanding

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Jan 1: Number of shares outstanding - 80K
Feb 1: Number of shares issued - 12K
Jun 30: 10% stock dividend declared
Jul 1: Number of shares reaquired - 6K
Oct 1: 2-for-1 stock split

The weighted average outstanding for the year is closest to:
a) 166,875
b) 192,400
c) 194,200
d) 194,400

Explain your answer before I provide the solution.

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C
((80+11)*1.1)-3))*2

Revising for splits and dividends, we get:

Jan 1: 176 shares (equal to (80 x 1.1)x2)) (weighted for 1 month)
Feb 1: 26.4 shares added (12 x 1.1 x 2) so 202.4 shares (weighted for 5 months)
Jul 1: 12 shares reacquired (6 x 2) so 190.4 shares (weighted for 6 months)

Weighted average is 194,200, so I would choose answer C.

Jan 1: Number of shares outstanding - 80K
Feb 1: Number of shares issued - 12K
Jun 30: 10% stock dividend declared
Jul 1: Number of shares reaquired - 6K
Oct 1: 2-for-1 stock split

1/1 80 * 12/12 * 1.1 * 2 = 176
2/1 12 * 11/12 * 1.1 * 2 = 24.2
7/1 (6) * 6/12 * 2 = (6)
========================
Total ……………………………..194.2
========================

Ans C

CP

Yes, C is the correct answer. Your responses summarize the necessary calculations.

Jan 1: Number of shares outstanding - 80K
Feb 1: Number of shares issued - 12K
Jun 30: 10% stock dividend declared
Jul 1: Number of shares reaquired - 6K
Oct 1: 2-for-1 stock split

{ [ 80,000 + 12,000(11/12) ] *1.1 - 6,000(1/2) }*2

= 194,200 (C)

Nice explanation Bluey. Very clear to me.

Thanks! That was helpful.

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