# Hah 2

Morning Time-Warner had the following information related to its common stock for the year. 1-Jan Number of shares outstanding 100,000 1-Mar Number of shares issued 15000 30-Jun 3.5% cash dividend declared 1-Jul Number of shares reacquired 12000 1-Oct Two-for-on stock split Weighted average shares outstanding for the year is closest to: A 212,000 B 213,000 C 225,000 D 150,000

100000 * 2 months + 115000 * 4months + 103000*3 months + 154500*1yr

I’d say D is the answer.

D - my answer comes out to 158250

Hank0414x Wrote: ------------------------------------------------------- > D - my answer comes out to 158250 what’s your method hank? give the breakdown.

I’d say B - 213,000 100000 = 200000 (after split) x 12 = 2,400,000 15000 = 30000 (after split) x 10 = 300,000 -12000 = -24000 (after split) x 6 = -144000 Divide all of that by 12 and you get 213,000…

soxboys21 Wrote: ------------------------------------------------------- > I’d say B - 213,000 > > 100000 = 200000 (after split) x 12 = 2,400,000 > 15000 = 30000 (after split) x 10 = 300,000 > -12000 = -24000 (after split) x 6 = -144000 > > Divide all of that by 12 and you get 213,000… Nice!! so basically if there is a split, other timings become irrelevant!

i agree wtih soxboys calculations, good job bud. ps big papi is coming on strong!

I’ll go with C 2*1.035*100*2/12+2*1.035*115*4/12+(2*1.035*115-2*12)*6/12=220.087, closer to C than to B

The cash dividend has nothing to do with shares outstanding. Also, considering it’s “declared,” it really has nothing to do with shares outstanding…

I MISSED THAT DIVIDEND WAS CASH! STUPID ME! =2*100*2/12+2*115*4/12+(2*115-2*12)*6/12 = 213, that’s exactly B

map1 Wrote: ------------------------------------------------------- > I MISSED THAT DIVIDEND WAS CASH! STUPID ME! > > =2*100*2/12+2*115*4/12+(2*115-2*12)*6/12 = 213, > that’s exactly B Map can you explain why you are only reacquiring 2 as opposed to 12?

not 2, 2*12 to account for the stock split

map1 Wrote: ------------------------------------------------------- > I MISSED THAT DIVIDEND WAS CASH! STUPID ME! > > =2*100*2/12+2*115*4/12+(2*115-2*12)*6/12 = 213, > that’s exactly B Where is 115 coming from? Shouldn’t it be 15? Also your 2*15*4/12 should be 10/12 (issued March 1st)…

map1 Wrote: ------------------------------------------------------- > not 2, 2*12 to account for the stock split (2*115-2*12)*6/12 What are you doing here? multiplying 2 to 115, when you only have 103? cuz you reacquired 12.

If there is no split (Dividend does nto change stocks outstandings): 100,000 * 2 / 12 115000* 4 /12 103000 * 6 / 12 Now as we had a split at the end, All the above gets multiplied by 2 (2 for 1 split)

Each period is weighted: the first is 2/12 months, January+February, the second is 4/12 months March to June, the third is 6/12 months, July to December.

map1 Wrote: ------------------------------------------------------- > Each period is weighted: the first is 2/12 months, > January+February, the second is 4/12 months March > to June, the third is 6/12 months, July to > December. thanks.

and 2*12 is what?

2 representing two months and total 12 months in a year. In general it is # of shares outstanding * # of months shares were outstanding / 12 (or total # of months in a year)