weighted average number of shares

[slourenco]

From Study Session 8, Reading # 36 (Dilutive Earnings and EPS):

Exercise 16-16

I'm having trouble with the answer to part a (the correct answer is 1,762,000 weighted average number of shares outstanding)

Here's my calc:
The year starts out with 480,000 shares outstanding:

2/1/2005: 480,000 + (11/12)(120,000)= 590,000
3/1/2005: 590,000 x 1.1 x 12/12 = 649,000
5/1/2005: 649,000 - 100,000 = 549,000
6/1/2005: 549,000 x 3= 1,647,000
10/1/2005: 1,647,000 + (3/12)(60,000)= 1,662,000

My final answer for Part A was 1,662,000, but the correct answer is 1,762,000. Any ideas on where I messed up and ended up off by 100,000 shares?

Thank you.

D.

 

[jamespucyk]

480 * 1.1 * 3 *1/12 = 132
600 * 1.1 * 3 *1/12 = 165
660 * 3 *2/12 = 330
(660 -100) *3 *1/12 = 140
560 * 3 * 4/12 = 560
1680 + 60 *3/12 = 435
-------------
1762

I use the text method, not schweser, so I can't give you much input.



Edited 1 time(s). Last edit at Saturday, April 15, 2006 at 01:07AM by jamespucyk.