MENU
Let's say that a company had 100,000 shares outstanding at the beginning of the year and issued 30,000 more shares on May 1. The 100,000 shares would be outstanding for four months and the 130,000 shares for eight months, or two-thirds of the year. The weighted average number of shares outstanding for the year would be:
Suggested Answer: B
Get Premium CVA Questions
as Interactive Web-Based Practice Test or PDF
Real Exam Format
Detailed Explanations
Instant Access
Get Your Practice Test
31 comments · newest first
ST
Stephen
10 months ago
Are we sure about that? Seems a bit off to me.
DE
Detra
10 months ago
I agree, 120,000 makes sense with the math.
CI
Ciara
11 months ago
Wait, how does that add up to 120k?
JU
Juliann
11 months ago
I think it’s definitely 120,000!
LO
Lore
11 months ago
The weighted average is calculated based on the time each share was outstanding.
LE
Leah
11 months ago
I think I remember that we add the shares outstanding for each period and then divide by the total months, but I’m a bit confused about the final calculation.
CY
Cyril
12 months ago
I feel like the answer might be around 120,000, but I’m not completely confident in how to break down the months for each share class.
LE
Leota
12 months ago
This seems similar to a practice question we did about stock issuance. I think we need to calculate the time each share was outstanding first.
MI
Misty
1 year ago
I remember we talked about calculating weighted averages in class, but I'm not sure how to apply it here with the different time periods.
NA
Nakisha
1 year ago
I'm pretty confident on this one. The key is to calculate the total share-months and then divide by the total number of months in the year. So (100,000 * 4) + (130,000 * 8) = 1,440,000 share-months, divided by 12 months = 120,000 weighted average.
RO
Rozella
1 year ago
Wait, I'm a little confused. Is the weighted average just the sum of the shares outstanding for each period divided by the total number of months? Or is there some other calculation I'm missing?
FR
Franchesca
1 year ago
Okay, I think I've got this. The 100,000 shares were outstanding for 4 months, and the 130,000 shares were outstanding for 8 months. So the weighted average would be (100,000 * 4/12) + (130,000 * 8/12) = 120,000.
LU
Ludivina
1 year ago
Hmm, this looks like a weighted average calculation. I'll need to think through the time periods and shares outstanding to get the right answer.
SC
Scarlet
1 year ago
Woohoo, a weighted average question! This is my jam. Alright, let's do this. *cracks knuckles* B) 120,000 shares, no doubt about it. I can practically smell the points on this one.
JO
Josefa
1 year ago
I agree with B) 120,000 shares. The extra shares issued in May don't have as much impact on the weighted average.
SA
Samira
1 year ago
I'm going with A) 100,000 shares. I think the original shares for 4 months should have more weight.
MA
Mariko
1 year ago
Hmm, I see your point. But I'm sticking with B) 120,000 shares. I'm pretty confident in my calculation.
FR
Fredric
1 year ago
I think it's actually C) 140,000 shares. The extra shares issued in May would be weighted for 8 months, not 4.
GL
Glory
1 year ago
Haha, this is like a math word problem straight out of my high school days. Let me see, 100,000 shares for 4 months, 130,000 shares for 8 months... Yep, B) 120,000 is the weighted average. Easy peasy!
AP
Apolonia
1 year ago
Wait, wait, wait. If the total shares were 130,000 for 8 months, that's 1,040,000 share-months. And the 100,000 shares for 4 months is 400,000 share-months. The total is 1,440,000 share-months, which divided by 12 months is 120,000 shares. B) is right, I got this!
TI
Timothy
1 year ago
Great job on figuring that out! It's important to understand how to calculate these financial metrics.
BE
Bette
1 year ago
Yes, you're correct! It's based on the weighted average number of shares outstanding for the year.
MI
Miesha
1 year ago
I think the answer is B) 120,000
ST
Stanton
1 year ago
Okay, let me think this through. We have 100,000 shares for 4 months and 130,000 shares for 8 months. That's a total of 12 months, so the weighted average should be 120,000. B) is the answer.
DE
Delsie
1 year ago
Great, so the answer is B) 120,000 shares.
DE
Dell
1 year ago
Yes, I agree. It makes sense to calculate it that way.
JO
Jose
1 year ago
I think you're right, the weighted average should be 120,000 shares.
PE
Penney
2 years ago
Hmm, let's see. If there were 100,000 shares for 4 months and 130,000 shares for 8 months, that sounds like a weighted average. I'll go with B) 120,000.
BR
Brett
2 years ago
I'm not sure about this one. Can someone explain how to calculate the weighted average number of shares outstanding?
EN
Enola
2 years ago
I agree with Vi. The rationale is that we need to calculate the weighted average based on the time each set of shares was outstanding.
VI
Vi
2 years ago
I think the answer is B) 120,000.