[ngdung]

Becker Question –

X Co. had the following stock transactions during the fiscal year ended June 30, Year 2:

Beginning stock balance, July 1, Year 1 100,000 shares

2:1 stock split, September 30, Year 1

Issuance of additional shares, January 1, Year 2 50,000 shares

Repurchase of shares, June 23, Year 2 1,040 shares

What was X Co.’s weighted average number of shares outstanding at June 30, Year 2?

a. 151,040

b. 224,980

c. 225,140

d. 251,040

The answer is 224,980. i dont understand why they get 1040 * 1/52 in calculate the # share outstanding in Repurchase of shares,June 23. Can any one help? Thanks

[kevlee]

1/5 is roughly about 7/365.

They repurchased the shares on June 23. The fiscal year end is June 30. The difference is is 7 days.

[Freyer002]

I actually remembered taking this exact question a week or so ago and picking the wrong answer. The reason they do the 1040*1/52 is because they are saying that the 1040 shares were only not outstanding for 1 week and there are 52 weeks in a year. You could also do 7/365 by counting the days out. But you need to do this step because they ask for the weighted average number outstanding.

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[ngdung]

thank you so much

[Author]

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