Under US GAAP we have the following info. about XYZ’s common stock. 1/1/2008: 1M sh outstanding 7/1//2008: .5M sh issued 9/1/2008: 2:3 reverse stock split 12/31/2008: 3.5M sh outstanding What’s its WASO to calculate EPS for 2008?
What is reverse stock split? in this case does it mean 3 shares for every 2 issued?
Your provided information doesn’t make any sense. If you start with 1 Million shares outstanding, issue .5 Million, and then have a 2/3 reverse split, you should only have 1 Million shares outstanding at year end. Where do you get 3.5 for year end?
Ok. Let’s modify it a bit. I just want to know the basics anyway. Under US GAAP we have the following info. about XYZ’s common stock. 1/1/2008: 1M sh outstanding 7/1//2008: .5M sh issued 9/1/2008: 3:1 stock split 12/31/2008: 3.5M sh outstanding What’s its WASO to calculate EPS for 2008?
1 * 3 + .5 * .5 * 3 = 3 + .75 = 3.75 again the 12/31 figure looks to be a red-herring.
What is not making sense is the mentioning of the shares outstanding. Never seen an end of year outstanding # of shares in a WASO question.
Map1, I think there was one on sample 3 if I remeber correctly It wasn’t used in the calc though
Exactly. I just don’t know what to do with that last-day-of-the-year number…
Nothing. Unless they ask for a determination of something that happen to get to that number, do nothing, it is meaningless.
Ok. And end-of-year sh oustanding figure could be different than the WASO for EPS, correct? If there’s a diff., where would the diff come from??? Usually no major events that could affect EPS calculation scheduled in the end of the year? [1*6/12 + (1+.5)*6/12] *3 = 3.75M
Of course it could be different, you’re looking for the weighted average in WASO, not for the end of year outstanding shares.