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Concord Corporation had 129,600 shares of stock outstanding on January 1, 2020. On May 1, 2020,...

Concord Corporation had 129,600 shares of stock outstanding on January 1, 2020. On May 1, 2020, Concord issued 64,800 shares. On July 1, Concord purchased 10,560 treasury shares, which were reissued on October 1. Compute Concord’s weighted-average number of shares outstanding for 2020. Weighted-average number of shares outstanding

Expert Solution

Solution :

As per the information given in the question we have

1.Number of shares of Concord corporation outstanding as on January 1, 2020 is 129,600 shares.

2.On May 1, 2020, Concord issued 64,800 shares.

3. On July 1, Concord purchased 10,560 treasury shares.

4. 10,560 treasury shares were reissued on October 1.

From the above it can be inferred that

For Period 1 : The number of shares of stock outstanding for the period of 4 months from January 1, 2020 to April 30, 2020 is = 129,600

For Period 2 : The number of shares of stock outstanding for the period of 2 months from May 1, 2020 to June 30, 2020 is = Opening balance of shares as on January 1, 2020 + No. of shares issued on May 1, 2020

= 129,600 + 64,800 = 194,400

For Period 3 : The number of shares of stock outstanding for the period of 3 months from July 1, 2020 to September 30, 2020 is

= Opening balance of shares as on January 1, 2020 + No. of shares issued on May 1, 2020 – No. of shares purchased for treasury on July 1, 2020

= 129,600 + 64,800 – 10,560 = 183,840

For Period 4 : The number of shares of stock outstanding for the period of 3 months from October 1, 2020 to December 31, 2020 is

= Opening balance of shares as on January 1, 2020 + No. of shares issued on May 1, 2020 – No. of shares purchased for treasury on July 1, 2020 + No. of shares issued on October 1, 2020

= 129,600 + 64,800 – 10,560 + 10,560 = 194,400

Thus the weighted average number of shares outstanding is =

= [ ( 129,600 * ( 4 / 12 ) ) + ( 194,400 * ( 2 / 12 ) ) + ( 183,840 * ( 3 / 12 ) ) + ( 194,400 * ( 3 / 12 ) ) ]

= 43,200 + 32,400 + 45,960 + 48,600

= 170,160

Thus Concord’s weighted-average number of shares outstanding for 2020 = 170,160

ekkarill92 answered 1 year ago

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