If 200,000 shares r outstanding on Jan 1, 50,000 issued on June 1 and 2 for 1 split on Aug 1, then is the weighted average no. 333,333.33 ?
Start with the split.
400,000 shares (200,000 * 2) for 12/12 = 400,000
100,000 shares (50,000 * 2) for 7/12 = 58,333
Total 458,333
You get 333,333 when you don’t split the shares before the split (which is wrong). The correct method is how cdealbuquerque said, you split the shares retroactively.
Yes, I got that. Thanx.
What’s the logic of retroactively adjusting the number of shares outstanding?