 # Weighted no. of shares o/s

A firm has had the following numbers of shares outstanding during the year: Beginning of year: 10,000,000 shares Issued on April 1: 500,000 shares Split 2 for 1 on July 1 Issued on October 1: 100,000 shares Split 2 for 1 on December 31 Based on this information, what is the weighted number of shares outstanding for the year? A) 20,780,000. B) 41,550,000. C) 42,400,000. D) 36,200,000.

I am having a lot of problem with this material, but let me try: 10*1/4 + 10.5*1/2 + 10.6*1/4 = 10.4 now multiply the whole thing by 4. 10.4 * 4 41.6 is what I get. B?

pepp Wrote: ------------------------------------------------------- > I am having a lot of problem with this material, > but let me try: > > > 10*1/4 + 10.5*1/2 + 10.6*1/4 = 10.4 > > > now multiply the whole thing by 4. > 10.4 * 4 > > 41.6 is what I get. > B? I came up with the same answer, 41,600,000. So I would pick B but I don’t know why the answer is different.

10,000,000*2*2=40,000,000+ 500,000*(.75)*2*2=1,500,000+ 100,000*(.25)*2=50,000 = 41,550,000 so i am going with B

10,000,000 x 2 x 2 = 40,000,000 (500,000)*(9/12)*2*2 = 1,500,000 (100,000)*(9/12)*2 = 50,000 41,550,000 B

((10000000*3/12 + 10500000*6/12)*2 + 21100000*3/12))2 = 41550000 B

C

B is correct… Can someone please explain the steps… I don’t seem to understand this calculation… thanks everyone…

Sorry, 41.6

Take the splits to beginning of year, so 10m * 4 = 40m then each action is multiplied by 4. Then just add up using weights.

that is partially right… the second issuance is done after the first split so it is only multiplied by 2. heha168’s way is also good

> the second issuance is done after the first split so it is only multiplied by 2 you’re absolutely right…

Got it!! Thanks 