# Weighted Average Shares Outstanding

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.

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

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 ©

Nice explanation Bluey. Very clear to me.