University Inc reported $84,000 in net income in 2018. On 1/1/18 company had 80,000 shares of...

University Inc reported $84,000 in net income in 2018. On 1/1/18 company had 80,000 shares of common stock. On May 1, 2018, 23,000 new shares of common stock were sold for cash. On July 1, 2018, the company declared and distributed 20% of common stock dividend. On October 1, 2018, 7,000 shares of common stock were reacquired as treasury stock. Compute Centrals weighted average common shares outstanding

A 116,150

B 112,300

C 112,650

D 109,150

Expert Solution

Time Period Outstanding Shares Fraction of Years Weighted Average

Jan'18 to April'18 80,000 *4/12 26,666

May'18 to June'18 1,03,000 *2/12 17,166

July '18 to Sep'18 1,23,600 *3/12 30,900

Oct'18 to Dec'18 1,16,600 *3/12 29,150

Total = 1,03,882

Since, Net income is also there then we need to compute it as well:

84000/80000= 1.05

Weighted Average Outsatnding share is 1,03,882*1.05= 1,09,076 approx

ekkarill92 answered 1 year ago

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