NACVA CVA Exam - Topic 3 Question 109 Discussion

Actual exam question for NACVA's CVA exam

Question #: 109
Topic #: 3

[All CVA Questions]

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:

A100, 000

B120,000

C140,000

D180,000

Show Suggested Answer

Suggested Answer: B

by Lawrence at Apr 03, 2025, 01:30 PM

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Stephen

3 months ago

Are we sure about that? Seems a bit off to me.

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Detra

3 months ago

I agree, 120,000 makes sense with the math.

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Ciara

3 months ago

Wait, how does that add up to 120k?

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Juliann

3 months ago

I think it’s definitely 120,000!

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Lore

4 months ago

The weighted average is calculated based on the time each share was outstanding.

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Leah

4 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.

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Cyril

4 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.

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Leota

4 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.

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Misty

5 months 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.

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Nakisha

5 months 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.

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Rozella

5 months 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?

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Franchesca

5 months 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.

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Ludivina

5 months 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.

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Scarlet

10 months 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.

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Josefa

8 months ago

I agree with B) 120,000 shares. The extra shares issued in May don't have as much impact on the weighted average.

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Samira

8 months ago

I'm going with A) 100,000 shares. I think the original shares for 4 months should have more weight.

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Mariko

9 months ago

Hmm, I see your point. But I'm sticking with B) 120,000 shares. I'm pretty confident in my calculation.

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Fredric

9 months ago

I think it's actually C) 140,000 shares. The extra shares issued in May would be weighted for 8 months, not 4.

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Glory

10 months 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!

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Apolonia

10 months 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!

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Timothy

9 months ago

Great job on figuring that out! It's important to understand how to calculate these financial metrics.

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Bette

9 months ago

Yes, you're correct! It's based on the weighted average number of shares outstanding for the year.

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Miesha

9 months ago

I think the answer is B) 120,000

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Stanton

10 months 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.

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Delsie

9 months ago

Great, so the answer is B) 120,000 shares.

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Dell

9 months ago

Yes, I agree. It makes sense to calculate it that way.

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Jose

10 months ago

I think you're right, the weighted average should be 120,000 shares.

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Penney

11 months 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.

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