Stock Dividend- 2 times in one year

[Ankit Sharma]

Hi, Consider this hypothetical question
Company A has net income= 100,000 , pays dividend to PS holders 50,000
1 Jan - outstanding in the beginning = 10,000
1 April- shares issued = 4000
1 July- 10% stock dividend
1 Sept- Stock repurchased = 3000
1 Nov - Again 10% stock dividend
Year end on 31 dec
Find EPS
Normally we have only single time spits or stock dividend , but If this happens then how we will do the adjusments and how the stock dividend on 1st Nov is going to effect the stock Divided on 1st July will the effect be Twice?
Thanks

 

[S2000magician]

I wrote an article on WACSO that may be of some help here: http://financialexamhelp123.com/weighted-average-common-shares-outstandi...

 

[Tartaglia]

I would treat the 2nd stock dividend the same way you did treat the first one, i.e. multiply all existing stocks by that increase. You basically do the retroactive replacing the S2000 does in his article for a 2nd time at the end of the year.
EPS should be 3.41 if I didn’t make a mistake somewhere.

 

[Ankit Sharma]

Thanks ! S2000
And Tartaglia The answer is seems to be correct Thanks!

 

[S2000magician]

You’re quite welcome.