EPS Q

Hi all , I tried solving this qusetion , but not able to understand …if someone on the forum can help me with this . A firm had the following numbers of shares outstanding during the year: Beginning of year 8,000,000 shares Issued on April 1 750,000 shares Paid stock divided of 20% on July 1 Issued on October 1 100,000 shares Purchased Treasury stock November 1 1,000,000 shares Split 2 for 1 on December 31 Based on this information, what is the weighted number of shares outstanding for the year?

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what was the answer given?

Options : A )20,783,333. B) 20,266,667. C) 42,444,444. Someone pls help me resolve this …will post the Q Bank answer later

Is the answer B?

Yeah it’s B. Just remember that stock splits and stock dividends are retroactive: Beginning of year: 8,000,000 shares x 1.2 (stock dividend) x 2 (split) x (12/12 months outstanding) = 19,200,000 Issued on April 1: 750,000 shares x 1.2 (stock dividend) x 2 (split) x (9/12 months outstanding) = 1,350,000 Paid stock divided of 20% on July 1 Issued on October 1: 100,000 shares x 2 (split) x (3/12 months outstanding) = 50,000 Purchased Treasury stock November 1: 1,000,000 x 2 (split) x (2/12 months outstanding) = 333,333.33 (* this is negative since the company purchased them i.e. they are no longer outstanding) Split 2 for 1 on December 31 So total = 19,200,000 + 1,350,000 + 50,000 - 333,333.33 = 20,266,667 (B)

Thx …yes the right answer is B. I was making an error while calculating the stock dividend