Question

On January 1, 2017, Hades Corporation had 800,000 shares of common stock outstanding. On March 1, the corporation issued 300,000 new shares to raise additional capital. On July 1, the corporation declared and issued a 2-for-1 stock split. On October 1, Hades purchased on the market 400,000 of its own shares and retired them.

Compute the weighted-average number of shares for the year 2017

Answer 1

On January 1, 2017, 800,000 common shares outstanding and holds it for 2 months

On March 1, 300,000 new shares issued = 300,000 , so total outstanding shares become 1,100,000 shares and held it for 4 months

On July 1, 2-for-1 stock split which is 1,100,000 *2/1 = 2,200,000 shares, held for 3 months

On October 1, 400,000 shares purchase bought back, 1,800,000 shares, held for 3 months

Weighted-average number of shares for 2017 is.

[(800,000 *2/12) + (1,100,000 * 4/12) + (2,200,000 * 3/12) + (1,800,000 * 3/12)]

[133,333.33 + 366,666.67 + 550,000 + 450,000]

Weighted-average number of shares for 2017 is 1,500,000