Answer:
See Explanation Below
Explanation:
Formula:
Shares is calculated by multiplying common stock by duration (in years)
1.
Given
Number of common shares issued and outstanding at December 31, 2015 = 2,000,000
Shares issued as a result of a 10% stock dividend on September 30, 2016 = 200,000
Calculating the weighted average number of common stocks:
Jan 1 2016 to Sept 30,2016:
First, note that there are 9 months between these two dates
So, the number of shares is calculated as: Common Shares * Duration (in years)
Number of Shares = 2,000,000 * 9/12
Number of Shares = 1,500,000
Jan 1 2016 to Sept 30,2016 - Adjusted
Given that there is a share issued as a result of 10% Stock dividend
Number of shares is calculated as 1,500,000 + the additional 10%
Number of Shares = 1,5000,000 + 10% * 1,500,000
Number of Shares = 1,500,000 + 150,000
Number of Shares = 1,650,000
Oct 1, 2016 to Dec 31, 2016
There are 3 months between these two dates
Common Shares between these dates = 2,000,000 + 200,000 --; This is gotten from outstanding shares of December 31, 2016 (2,000,000) and shares issued as a result of 10% Stock dividend (200,000)
Duration = 3/12 --- (by converting month to years)
So, Number of Shares = Common Shares * Duration
Number of Shares = 2,200,000 * 3/12
Number of Shares = 550,000
Total = 1,650,000 + 550,000
Total = 2,200,000 Shares
2.
Jan 1, 2017 to Mar 31, 2017
We'll still make use of the formula used in (1) above
Common Stocks * Duration (in years)
Between these dates, there are three months and common stock =2,200,000 --- as calculated in (1) above
So, Number of shares = 2,200,000*3/12 = 550,000
March 1,2017 to Dec31,2017
Given
Number of common shares issued and outstanding at December 31, 2017 = 4,200,000
Here, Common stocks = 4,200,000
Duration = 9/12
Number of Shares = 4,200,000*9/12 = 3,150,000
Total Number of Shares = 550,000 + 3*150,000 = 3,700,000
3.
Given
Weighted number of shares for 2017 = 3,700,000 --- calculated in (3) above
Weighted average number of shares = 2 * Weighted number of shares for 2017
Weighted average number of shares = 2 * 3,700,000
Weighted average number of shares = 7,400,000
4.
Jan 1, 2017 to Mar 31,2017.
Duration between these dates = 3/12 years
Number of common shares issued and outstanding at December 31, 2017 = 4,200,000
Number of Shares = 4200,000*3/12 = 1,050,000
April 1, 2017 to Dec 31, 2017
Duration = 9/12 years
Common Stocks = 4,200,000 * 2
Number of Shares = 4200,000*2*9/12 = 6,300,000
Total = 1,050,000 + 6,300,000 = 7,350,000
