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Basic Question 12 of 40
What adjustment needs to be made when computing the weighted average number of shares of common stock outstanding for a company whose shares were issued on April 1? The number of shares issued must be ______
B. multiplied by 9 and then divided by 12.
C. divided by 12 and then multiplied by 3.
A. added directly to the numerator of the earnings per share equation with no adjustment needed.
B. multiplied by 9 and then divided by 12.
C. divided by 12 and then multiplied by 3.
User Contributed Comments 2
| User | Comment |
|---|---|
| teddajr | Suppose the company started operation on April 1, then should there be any weighted adjustments? Should not the total outstanding, as in the above situation, be used instead of Weighted Avg ? |
| Drzewes | there's a difference between company which issued its shares in the mid of the year and had EPS = 2 dollars and similar company that issued its shares at the beginning of the year and had EPS= 2 dollars |
Your review questions and global ranking system were so helpful.
Lina
Learning Outcome Statements
describe how earnings per share is calculated and calculate and interpret a company's basic and diluted earnings per share for companies with simple and complex capital structures including those with antidilutive securities
CFA® 2025 Level I Curriculum, Volume 2, Module 2.